Trump-Linked Stablecoin USD1 Surges to $5 Billion Market Cap Amid Crypto Market Turbulence
In a striking divergence within the cryptocurrency sector, the Trump-branded stablecoin USD1 has soared to a $5 billion market capitalization, securing a place among the top five dollar-pegged tokens globally. This milestone, achieved last week, comes as the broader market grapples with a sharp sell-off in highly speculative assets, particularly meme coins.
Issued by the fintech startup World Liberty Financial—closely linked to former President Donald Trump's family—USD1 launched in March 2025. It is backed by cash and U.S. money-market funds and maintains a tight peg to the dollar. The stablecoin operates across multiple blockchains, including Solana, and is marketed as a tool for institutional cross-border payments and trading.
However, a Wall Street Journal investigation has revealed a previously undisclosed layer to the project. According to the report, a secret deal signed in January 2025 granted a 49% stake in the Trump family's crypto venture to an entity backed by UAE Sheikh Tahnoon bin Zayed Al Nahyan. The agreement was signed by Eric Trump. The report also notes at least $31 million was directed to entities affiliated with Steve Witkoff, a World Liberty co-founder who was later appointed U.S. envoy to the Middle East.
The stablecoin's profile was significantly raised earlier this year when Abu Dhabi's sovereign wealth fund MGX reportedly used it to settle a $2 billion investment into the crypto exchange Binance. This transaction, followed by former President Trump's pardon of Binance founder Changpeng Zhao and the token's subsequent integration into Binance's core systems, has drawn intense scrutiny from lawmakers.
Senator Elizabeth Warren has led the charge, expressing grave concerns to Treasury Secretary Scott Bessent and Attorney General Pam Bondi. In a letter, Warren warned of potential national security risks, citing blockchain data that allegedly links approximately $263 million in funds on the decentralized exchange PancakeSwap—which has a liquidity partnership with World Liberty Financial to support USD1 trading—to North Korean laundering activity.
Amid the controversy, World Liberty Financial is seeking to bring its operations under direct federal oversight. The company has applied to the Office of the Comptroller of the Currency to establish a nationally chartered trust bank, the World Liberty Trust Company. If approved, this entity would manage USD1's issuance, redemption, and reserves under federal supervision.
Promoting the project on social media, Donald Trump Jr. framed USD1 as a long-term infrastructure play. "This is about building a U.S.-led payments rail for the future, not chasing the hype of the next meme coin," he stated on Wednesday.
Market Reactions & Commentary
Marcus Chen, Crypto Portfolio Manager (Hong Kong): "The market cap milestone is impressive, but the real story is the regulatory end-game. If they secure the trust bank charter, it legitimizes the asset in a way few crypto projects achieve. The geopolitical connections, however, add a layer of complexity that institutional investors will weigh carefully."
Sarah Jennings, Fintech Analyst at Brookings Institute (Washington, D.C.): "This represents a fascinating convergence of political finance, digital assets, and foreign policy. The attempt to move under a federal trust structure is a clear bid for credibility, but the reported UAE deal and the Binance sequence raise serious questions about transparency and the blending of personal, political, and business interests."
David K. Lee, Retail Investor & Commentator (Online): "Are you kidding me? This is a blatant end-run around traditional banking regulations, backed by foreign sovereign money and political connections. Warren is right to sound the alarm. Calling it 'infrastructure' doesn't wash away the stench of a politically-powered cash grab while the average crypto investor gets wrecked on meme coins."
Priya Sharma, Blockchain Compliance Officer (London): "The technical execution and peg stability are commendable so far. The compliance path they're pursuing with the trust bank application is the correct, albeit challenging, route. The allegations regarding illicit finance on partnering DEXs are a significant reputational risk that must be addressed with transparent, auditable on-chain controls."