Senators Raise Conflict of Interest Concerns Over Trump’s WLFI Stablecoin

Highlights:

• Senators warn of conflicts in WLFI’s USD1 stablecoin due to Trump’s involvement.
• GENIUS Act could grant Fed and OCC control over stablecoin regulations, raising concerns.
• Trump’s executive order increases White House influence over federal financial policies.

Five Democratic senators have raised concerns about the regulatory risks of USD1, a stablecoin launched by World Liberty Financial (WLFI). This cryptocurrency project is backed by President Donald Trump and his family. In a March 28 letter to Federal Reserve Vice Chair Michelle Bowman and Acting Comptroller Rodney Hood, the senators highlighted possible conflicts of interest. 

The senators are Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland, Jack Reed of Rhode Island, Cory Booker of New Jersey, and Ron Wyden of Oregon. They questioned how a stablecoin linked to a sitting president could be properly regulated. They warned it poses unprecedented risks to the financial system.

[https://t.co/js1cF5YYGT] Warren, Wyden, Van Hollen, Colleagues Question Fed and OCC on Serious Risks Posed by Donald Trump Regulating His Own Stablecoin$WLFI pic.twitter.com/bpkimMu1Jj

— BecauseBitcoin.com (@BecauseBitcoin) March 28, 2025

New Stablecoin Act Sparks Senate Concerns Over White House Influence

Congress is currently debating the GENIUS Act, a new bill focused on stablecoin regulation. If passed, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act would grant oversight powers to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve. This would allow them to regulate stablecoin issuers like WLFI and its USD1 coin, signaling a significant shift in crypto regulation.

In February, Trump signed an executive order requiring federal agencies to coordinate with the White House regularly. This includes agencies like the Office of the Comptroller of the Currency. The order gives the president greater control over federal decisions and policies. Senators are concerned about the lack of safeguards against White House interference. They fear the bill’s signer could influence enforcement actions. This could allow them to shape the system for personal gain.

The senators wrote:

“President Trump’s involvement in this venture, as he strips financial regulators of their independence and Congress simultaneously considers stablecoin legislation, presents an extraordinary conflict of interest that could create unprecedented risks to our financial system and to the integrity of decisions made by the [Fed and OCC].”

WLFI and Trump’s Involvement

World Liberty launched in September last year, months before the US election and Trump’s inauguration. Since then, many of its goals have remained shrouded in secrecy. The project’s website states that Trump and his family hold 60% of the company’s equity interests.

By March 14, World Liberty had raised $550 million from two token sales. On March 24, it launched its first stablecoin on BNB Chain and Ethereum. Trump Jr. promoted USD1 at the DC Blockchain Summit on March 26 with WLFI’s co-founders. Senators doubt regulators can oversee WLFI fairly due to its ties to the president.

Meet USD1 — the stablecoin your portfolio’s been waiting for.

Built for institutions and retail alike. Backed by dollars. Custodied by BitGo.
No games. No gimmicks. Just real stability.https://t.co/vXPbZe0GPn

— WLFI (@worldlibertyfi) March 25, 2025

Stablecoin Market Dominance

The stablecoin market is dominated by Tether’s USDT ($144B) and Circle’s USDC ($60B) in market capitalization. Ethena’s USDe holds a valuation of just over $5 billion. PayPal’s PUSD and Ripple’s RLUSD are worth $804 million and $193 million, respectively.

Meanwhile, new players are emerging. Wisconsin is testing a state-backed stablecoin on Ethereum, Solana, and Avalanche, while Fidelity, a $5 trillion asset manager, is exploring its own stablecoin launch.