USD1 enters the market, bringing new variables to the crypto landscape.
Author: Joyce | Blockchain in Plain Language
On March 25, 2025, the Trump family launched the USD1, a dollar-pegged stablecoin, through "World Liberty Financial" (WLFI), instantly igniting heated discussions in the crypto market.
As the current President of the United States, Donald Trump has transformed from a "skeptic" of cryptocurrency to a "supporter," and now he is directly involved with his family in launching this new project. USD1 not only embodies the Trump family's business ambitions but is also seen as a significant move to leverage political influence to disrupt the crypto market.
The stablecoin market has long been a battleground for giants, with Tether (USDT) and Circle (USDC) holding nearly 90% of the market share. Why is the Trump family entering the fray at this time? Can they break the existing pattern with USD1? More importantly, what ripple effects will this "presidential-backed" stablecoin bring to the crypto market?
01
USD1: The Trump Family's Stablecoin Blueprint
USD1 is a dollar-pegged stablecoin launched by the Trump family through World Liberty Financial (WLFI), aimed at providing a "safe, compliant, and transparent" digital dollar tool for institutional and sovereign investors.
According to WLFI's official statement, USD1 will be 100% backed by short-term U.S. Treasury bonds, dollar deposits, and other cash equivalents, ensuring that each USD1 Token can be exchanged for one dollar at a 1:1 ratio. This design is similar to mainstream dollar stablecoins (such as USDT and USDC), but WLFI emphasizes its "institutional-grade" compliance and transparency, attempting to attract large investors.
Specifically, USD1's operational model has the following key points:
Asset Support and Custody:
The reserve assets of USD1 will be held by BitGo, a crypto custody company based in California. BitGo not only provides secure storage but also offers deep liquidity and trading support for USD1 through its Prime brokerage services. WLFI states that the reserves of USD1 will be regularly audited by a third-party accounting firm to ensure transparency. However, as of March 25, 2025, WLFI has not disclosed the name of the specific accounting firm involved.
Blockchain Support:
USD1 will initially be issued on Ethereum and Binance Smart Chain, with plans to expand to other blockchain networks in the future. This choice reflects WLFI's preference for mainstream public chains. Ethereum is at the core of the DeFi ecosystem, while BSC holds an important position in the crypto market due to its low transaction fees and high throughput. According to data from Etherscan and BscScan, USD1's smart contract was deployed in early March 2025, with a total supply exceeding $3.5 million, but trading has not yet opened.
Target Users:
WLFI clearly states that USD1 is not aimed at retail investors but is designed for institutional and sovereign investors. WLFI co-founder Zach Witkoff stated: “What we offer is a digital dollar stablecoin that sovereign investors and large institutions can confidently integrate into their strategies for seamless and secure cross-border transactions.” This positioning indicates that the Trump family aims to penetrate the institutional market with USD1, challenging the existing stablecoins' applications in cross-border payments and DeFi.
Integration with Traditional Finance:
The design concept of USD1 emphasizes integration with traditional finance. Witkoff stated that USD1 “provides advantages that algorithmic stablecoins and anonymous DeFi projects cannot offer—backed by the most respected brands in traditional finance while gaining the powerful functionalities of DeFi.” WLFI also plans to collaborate with DeFi projects such as Sui, Ondo Finance, Chainlink, and Aave to explore how to more closely integrate blockchain finance with traditional finance.
It is worth mentioning that USD1 is not the Trump family's first attempt in the crypto space. In October 2024, WLFI launched another crypto token, WLFI, and raised $550 million through two public token sales, with 75% of the proceeds going to entities associated with the Trump family.
Additionally, Trump and First Lady Melania also launched their own memecoins before taking office. Trump's memecoin $TRUMP, launched on January 17, 2025, saw its market cap soar to $14 billion at one point but subsequently experienced a decline of over 80%.
02
Stablecoins Under the U.S. Regulatory Storm
As an important component of the crypto market, stablecoins have attracted significant attention from U.S. regulators in recent years. After Trump took office, his pro-crypto policy inclination brought new opportunities to the stablecoin industry, but it also came with potential challenges. The launch of USD1 unfolds against this complex backdrop.
Trump Administration's Pro-Crypto Policies:
During his campaign, Trump promised to make the U.S. the "crypto capital," and after taking office, he quickly implemented a series of pro-crypto measures.
In January 2025, Trump signed an executive order aimed at promoting the development of the U.S. crypto industry and proposed the idea of establishing a national crypto reserve. In early March, he further announced the creation of a U.S. strategic crypto reserve that includes Bitcoin, Ethereum, XRP, Solana, and Cardano.
Trump's pre-office commitments to crypto directly drove the surge in the crypto market, with Bitcoin's price surpassing $107,000 by the end of 2024, nearly a 100% increase since before Trump's campaign.
Advancement of Stablecoin Legislation:
In March 2025, the U.S. Congress was reviewing the "Guidance and Establishment of a National Innovation Act for U.S. Stablecoins." This bill passed the Senate Banking Committee on March 13 and is expected to be submitted for Trump's signature before June. The bill aims to establish a new regulatory framework for stablecoin issuers, granting them legal status similar to traditional banks.
For USD1, the advancement of this bill is undoubtedly a significant boon. As a project of the Trump family, USD1 may receive priority treatment in regulatory approval and market access. However, this has also raised concerns about potential conflicts of interest. The Trump family's direct involvement in crypto projects while the Trump administration promotes policies favorable to the crypto industry has led some government ethics experts and political opponents to criticize this "playing both referee and player" role.
Regulatory Challenges and Market Competition:
Despite policy support, USD1 still faces considerable challenges.
First, the competition in the stablecoin market is exceptionally fierce. Tether (USDT) and Circle (USDC) have established dominant positions, with market shares far ahead. In January 2025, the total market cap of stablecoins surpassed $200 billion, with the number of active wallets for USDT and USDC growing by over 50% in the past year. In contrast, as a new player, USD1 will find it challenging to quickly establish market trust and an ecosystem.
Second, regulatory uncertainty remains. Although the Trump administration has a friendly attitude toward the crypto industry, stablecoins involve cross-border payments and financial stability, which may trigger additional scrutiny from institutions like the Federal Reserve and the Treasury Department. Furthermore, the Trump family's involvement may make it a focal point of political maneuvering, further increasing policy risks.
03
Ripple Effects of USD1
The launch of USD1 is not only another attempt by the Trump family in the crypto space but may also have profound implications for the entire market:
Impact on the Stablecoin Market Landscape:
The entry of USD1 will intensify competition in the stablecoin market. Although it is initially positioned for institutional investors, if it can successfully build trust and expand its user base, it may threaten the market shares of USDT and USDC. In particular, USD1's backing by the Trump family's political influence may attract more attention from traditional financial institutions and sovereign funds, thereby promoting the application of stablecoins in cross-border payments and DeFi.
However, market expert Kevin Lehtiniitty pointed out: "Launching a stablecoin is easy, but building a widely adopted ecosystem is much more difficult."
USD1 will face fierce competition from Tether and Circle, and whether the Trump family will collaborate with other U.S. companies or compete directly remains uncertain.
Potential Impact on Dollar Hegemony:
Both the Trump administration and WLFI emphasize that the launch of USD1 will help consolidate the dollar's dominant position in the global financial system. As global demand for dollar stablecoins increases, USD1 may become a new tool for the digitization of the dollar, further promoting its use in international trade and payments.
At the same time, the proliferation of stablecoins may also disrupt the traditional financial system. The efficient cross-border payment capabilities of stablecoins could challenge the status of existing financial intermediaries, affecting their revenues in the multi-trillion-dollar short-term fixed income market.
Overall Impact on the Crypto Market:
The Trump family's involvement undoubtedly injects new attention into the crypto market. The launch of USD1 may attract more traditional investors into the crypto space, further mainstreaming the market. Additionally, the Trump administration's pro-crypto policies may stimulate the emergence of more innovative projects, further enhancing the activity in the crypto market. However, risks also exist.
The Trump family's involvement may exacerbate market speculation, leading to increased price volatility. $TRUMP is an example, as its price has fallen over 80% since peaking on January 19, 2025, reflecting the speculative nature of the market regarding its project. If USD1 cannot effectively manage market expectations, it may face similar risks.
Promotion of the DeFi Ecosystem:
One of USD1's goals is to become an important part of the DeFi ecosystem. WLFI plans to develop a decentralized finance platform that is easy for ordinary people to use through collaborations with projects like Aave and Chainlink. If USD1 can establish a foothold in the DeFi space, it may drive more institutional funds into DeFi, further expanding the scale of this market.
04
Conclusion
The Trump family's entry into the stablecoin arena through USD1 is not only another attempt to expand their business empire but also a bold move in the political and financial realms. With its institutional positioning, compliant design, and political endorsement, USD1 is expected to carve out a place in the stablecoin market. However, facing fierce market competition and a complex regulatory environment, the future of USD1 remains uncertain.
For the entire crypto market, the launch of USD1 may become a significant turning point. It could not only reshape the landscape of the stablecoin market but also pave the way for further mainstreaming of the crypto industry by promoting the digitization of the dollar and the development of DeFi. At the same time, the Trump family's involvement also brings new risks, including conflicts of interest, market speculation, and regulatory uncertainty.
Whether USD1 can truly stir the market may only be answered by time.
Article link: https://www.hellobtc.com/kp/du/03/5727.html
Source: https://mp.weixin.qq.com/s/kTlCYaxXbHgtLh2v03FGuA
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