Trump’s crypto empire launches a new digital currency

President Donald Trump’s crypto empire is expanding with the recent announcements of a new dollar-backed stablecoin and investment funds for digital assets. The moves are the latest in the norm-defying ways the president has leaned into crypto projects that could significantly boost his personal wealth while in office.

World Liberty Financial, a cryptocurrency venture Trump helped launch last year, announced on Tuesday that it plans to launch USD1, a stablecoin pegged at a 1-to-1 ratio to the US dollar.

The Trump family, including the president and his sons Eric and Donald Jr, have been actively promoting the World Liberty Financial project through social media and public appearances.Credit: AP

Stablecoins are among the fastest-growing segments of the cryptocurrency industry. They are typically backed by a government-issued currency, like the dollar or gold, making them better suited to commercial transactions than more volatile digital assets like bitcoin or other cryptocurrencies.

“We’re offering a digital dollar stablecoin that sovereign investors and major institutions can confidently integrate into their strategies for seamless, secure cross-border transactions,” Zach Witkoff, a World Liberty Financial co-founder, said in a statement on Tuesday.

World Liberty’s announcement comes amid a push by Congress, with strong support by the White House, to pass legislation that supporters say would make it easier for stablecoin companies to operate and grow in the US.

Stablecoins have long drawn attention and criticism for the ways in which they have made it easier for criminals to move money across national borders. The current debate has focused on how the tokens could be vulnerable to the kind of bank runs that paralysed the financial system during past financial crises, all of which might be amplified if the proposed legislation allows the industry to grow.

Sceptics have also raised concerns about Trump’s ties to the space and his company’s involvement with Binance. At a Senate hearing about one of the proposed bills earlier this month, top Democrat senator Elizabeth Warren pointed to Binance’s checkered legal past as evidence of why such rules are needed.

“We should be standing up to this kind of naked corruption, not trying to figure out how to build a superhighway so it can take off even faster, bigger, and better,” Warren said at the hearing.

Witkoff and his father, Trump’s special diplomatic envoy Steve Witkoff, helped launch World Liberty Financial with Trump and his sons last year. Under the terms outlined on the company’s website, a Trump-owned company has the “right to receive 75 per cent of the net protocol revenues” from World Liberty Financial after expenses.

On Monday, Trump Media announced it was partnering with the crypto-trading firm Crypto.com to launch exchange-traded funds for investors to purchase. The funds, which are set to be released later this year, will include a “unique ETF basket of cryptocurrencies” as well as “securities with a Made in America focus spanning diverse industries such as energy,” TMTG said in an announcement.

TMTG is the parent company of Trump’s social media company, Truth Social. Trump has no decision-making role at the company, but he owns a majority stake and is its largest shareholder. TMTG’s stock price jumped following the announcement.

The recent announcements add to a growing list of crypto-related projects that Trump has endorsed in ways that critics say are inappropriate for a public office holder.

Just days before taking office, Trump launched his own meme coin that initially saw a massive price spike followed by a prolonged slide. Meme coins are highly speculative assets that often start as a joke and have no real value. Trump has also promoted online watch and sneaker stores that have branched out into selling crypto-related Trump products, including a “Crypto President” timepiece that sells for $US100,000 ($158,700).

Once a crypto sceptic, Trump has since embraced digital assets and pledged to make the US the “world capital” for cryptocurrencies. He’s taken several early steps to help boost the crypto industry, which spent heavily to help Trump win last year’s election and has emerged as a potent political force.

Before taking office, the Trump family business released a voluntary ethics agreement that prohibits the president from “day-to-day” decision-making of his companies and limits financial information shared with him. But that agreement doesn’t bar him from promoting his crypto-related products as he did on social media on Sunday when touting his meme coin.

“I LOVE $TRUMP — SO COOL!!! The Greatest of them all!!!!!!!!!!!!!!!!,” Trump posted on Truth Social, which briefly caused a spike in the meme coin’s price.

AP, Bloomberg

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