On March 25, 2025, World Liberty Financial Inc. (WLFI) officially announced plans to launch a stablecoin named USD1, which can be exchanged 1:1 for US dollars and is fully backed by short-term U.S. Treasury securities, dollar deposits, and other cash equivalents. This move has sparked heated discussions in the cryptocurrency market and has also attracted widespread attention from regulators and financial markets.
USD1 is planned to be issued on Ethereum and Binance Smart Chain, with future plans to expand to other blockchains. This means that the stablecoin can be used across multiple decentralized finance (DeFi) platforms, providing institutional investors with a highly liquid digital dollar option. The reserve assets of USD1 will be custodied by the well-known digital asset custodian BitGo, with liquidity support provided by BitGo Prime. This mechanism ensures the transparency and stability of USD1, making it a regulated and audited financial instrument. A third-party accounting firm will regularly audit the USD1 reserves to ensure it truly achieves a 1:1 exchange for US dollars.
Currently, the stablecoin market is primarily dominated by Tether (USDT), Circle's USD Coin (USDC), and Binance USD (BUSD) issued by Paxos. According to AiCoin data, the total market capitalization of global stablecoins has exceeded $250 billion. USDT currently holds over 60% of the market share, while USDC also has a significant market share. As a cryptocurrency project supported by the Trump family, USD1 will compete with the aforementioned leading stablecoins upon entering the stablecoin market. Compared to USDT and USDC, USD1 uses 100% short-term U.S. Treasury securities and dollar deposits as reserve assets, a design that is closer to the transparency model of USDC, which may have a certain impact on the market.
In recent years, U.S. regulators have increasingly focused on stablecoins. The Federal Reserve, the Treasury Department, and the Securities and Exchange Commission (SEC) have all stated that they will strengthen regulation of the stablecoin market to ensure it does not affect financial stability. The Trump family's direct involvement in the USD1 project may raise potential conflicts of interest and political risks. Additionally, the SEC has recently imposed strict regulations on BUSD issued by Paxos, accusing it of having securities attributes. This regulatory trend indicates that USD1 may need to undergo rigorous compliance reviews to operate smoothly in the U.S. market in the future.
According to the official announcement from WLFI, the USD1 project has successfully raised $550 million in funding, primarily from private and institutional investors. The political influence of the Trump family may be a key factor in attracting market attention to USD1, but whether it can truly gain market recognition will still depend on its compliance, stability, and liquidity. Some industry experts believe that if USD1 can be successfully launched, it will further drive competition in the stablecoin market while providing new options for institutional investors. However, there are also concerns about its political attributes, and some investors may have reservations about its compliance and long-term stability.
The launch of USD1 may affect the global stablecoin market landscape and could also accelerate the entry of other financial institutions into the stablecoin space. For example, traditional banking and payment companies, such as Visa, MasterCard, and PayPal, are actively exploring the applications of stablecoins and central bank digital currencies (CBDCs).
In the next 12 months, the key challenges USD1 needs to overcome include:
- Obtaining regulatory approval: Ensuring compliance with regulatory requirements in the U.S. and other major financial markets.
- Enhancing market liquidity: Ensuring trading depth for USD1 in the secondary market through partnerships with BitGo Prime and other institutions.
- Building trust with institutional investors: Increasing market trust through transparent reserve asset management and third-party audits.
Overall, the launch of USD1 as a cryptocurrency project supported by the Trump family is undoubtedly a bold move in the stablecoin market. Its future success will depend on market acceptance and changes in the regulatory environment.
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