By Virginia Canter and Christopher Swartz
The steadiness of the U.S. Treasury market is the bedrock of the greenback’s international dominance. Traditionally, that stability has all the time been unbiased of the non-public monetary pursuits of any single individual or politician, together with the president of the USA. Till now.
For the reason that fall of 2024, journalists, advocates, and watchdog teams (together with our group, Democracy Defenders Fund) have documented the extraordinary progress of President Donald Trump’s private wealth via cryptocurrency ventures. Central to that surge is his substantial stake in World Liberty Financial and its Treasury-backed stablecoin, USD1.
Stablecoins are cryptocurrencies that promise a set worth, usually one greenback, backed by money or authorities debt comparable to U.S. Treasury securities. The president’s stake within the stablecoin business, which he maintains whereas overseeing the implementation of laws such because the GENIUS Act, represents an unprecedented battle of curiosity. Of even perhaps larger concern, he’s now within the place of holding a direct monetary stake in a digital asset whose worth and viability are tied to U.S. authorities debt itself. The chance this poses to the financial system demands serious scrutiny.
Since he entered the 2016 presidential race, Trump has repeatedly touted his private wealth, usually claiming that serving as president prevents him from amassing extra of it. Throughout his first time period, he failed to divest from his enterprise holdings or place them in an actual blind belief, as an alternative transferring day-to-day management to his sons whereas retaining possession. Even then, his private ventures weren’t immediately tied to the muse of the U.S. monetary system.
This time is totally different. Trump is making offers in broad daylight, brazenly entwining his presidency with non-public revenue, doing so partly via a monetary instrument that not solely enriches him personally however can also be immediately linked to the U.S. Treasury market.
Inside weeks of World Liberty Financial launching USD1, a United Arab Emirates–backed funding fund introduced it might use $2 billion worth of USD1 to finance a take care of Binance, one of many world’s largest crypto exchanges. The transaction generated fast income for World Liberty Financial, considerably rising its valuation. As a result of Trump and his household maintain a big stake within the firm, the deal considerably elevated the worth of their private holdings.
In the meantime, the transaction left Binance accountable for roughly 75% of USD1’s market capitalization. In sensible phrases, a single non-public actor now wields outsized affect over a stablecoin whose reserves are deeply embedded within the U.S. Treasury market and whose efficiency immediately impacts the president’s private wealth. If Binance have been to redeem a good portion of its USD1 holdings, World Liberty Financial can be pressured to quickly liquidate billions of {dollars} in Treasury-backed property to meet these redemptions. Tutorial analysis and our own analysis present that sudden, concentrated Treasury gross sales can pressure market liquidity and destabilize the broader monetary system.
A President with Pores and skin within the Recreation
Income from USD1 is generated via curiosity earned on the stablecoin’s reserve property. So long as the stablecoin’s provide stays steady, the Trump household stands to earn tens of hundreds of thousands of {dollars} yearly via its controlling stake in World Liberty Financial.
It’s value pausing to think about the implications. Every year, Trump’s firm can reportedly generate up to $80 million in largely passive revenue so long as USD1 and its reserves stay steady. A president whose private fortune relies on stablecoin profitability could also be reluctant to implement laws that restrict or constrain dangerous conduct by main holders of his personal stablecoin. In a disaster, he could hesitate to act within the public curiosity if doing so would undermine his personal monetary pursuits. Overseas actors and different particular pursuits who acknowledge this dynamic might even see a chance to exert affect over the president or U.S. coverage.
There may be already one troubling instance. The USD1–Binance deal preceded Trump’s pardon of Binance co-founder Changpeng Zhao, who served 4 months in federal jail after pleading guilty in November 2023 to violating U.S. anti-money laundering legal guidelines that prosecutors mentioned threatened nationwide safety. The deal additionally coincided with a broader rollback of crypto enforcement throughout the federal authorities, together with the dismantling of the Justice Department’s National Cryptocurrency Enforcement Team in April 2025 and the Securities and Alternate Fee’s retreat from major crypto cases involving Trump-linked traders all through 2025.
By no means earlier than has a U.S. president held a direct monetary curiosity in an instrument able to transmitting system-wide stress into the Treasury market, not to mention taken actions to pardon people who’ve a controlling stake in corporations that financially profit him. Not to point out that his appointees have halted investigations into these and different corporations that will profit him. These info alone ought to alarm lawmakers, regulators, and residents throughout the political spectrum.
Lax, Nonexistent Enforcement and Oversight
The GENIUS Act, which Trump signed into legislation in July, established a regulatory framework for “fee stablecoins” whereas exempting them from oversight by the Securities and Alternate Fee and the Commodities Future Buying and selling Fee – with out addressing conflicts of curiosity or imposing strong, uniform capital and liquidity necessities. The legislation fails to shield the Treasury market or to forestall senior officers, together with the president, from making the most of monetary devices tied immediately to it.
For the reason that GENIUS Act’s passage, Trump’s crypto companies have turn out to be much more entangled with international governments and extra embedded within the monetary system. Simply this month, an “affiliated entity” of World Liberty Financial introduced a take care of the Pakistan Virtual Asset Regulatory Authority to combine the USD1 stablecoin into Pakistan’s digital asset infrastructure. This month, a World Liberty Financial affiliate filed an software with the Workplace of the Comptroller of the Forex to set up a national trust bank that will permit it to difficulty USD1 and supply a broader set of stablecoin providers to shoppers.
Towards this troubling backdrop, it’s stunning that Congress has but to meaningfully deal with presidential conflicts of curiosity through the ongoing debate over digital market construction laws. Congress ought to conduct fast oversight, strengthen capital and liquidity necessities for stablecoins, restore crypto enforcement authorities, and set up clear guardrails to forestall senior officers from making the most of cryptocurrency and different monetary devices whose volatility may threaten our monetary system.
If lawmakers fail to act, taxpayers and monetary markets will bear the price, not crypto speculators or political insiders.
Virginia Canter is the chief counsel and director of ethics and anti-corruption at Democracy Defenders Fund. Christopher Swartz is senior ethics counsel at Democracy Defenders Fund.
