Donald Trump's crypto project plans to launch stablecoin
Donald Trump's DeFi-focused cryptocurrency project called World Liberty Financial plans to develop and launch a stablecoin of its own, according to sources.
Recently, World Liberty Financial raised $14 million in an initial token sale. Now, the project would be working on its own stablecoin, which is still in the development phase and should take time until it is available on the market.
The project team is currently focused on ensuring the security and stability of the financial asset before its introduction to the market, as reported by a source.
In parallel, other key components of the Trump-backed project are under development to ensure they are ready for launch in a timely manner. A recent move by the project indicated a possible breakthrough in stablecoin creation, with the appointment of Rich Teo, co-founder of Paxos, as stablecoin and payments lead at World Liberty.
Teo and representatives from World Liberty Financial, however, did not respond to requests for comment on the project.
Trump-backed World Liberty Financial studies stablecoin
World Liberty Financial has already gained attention and generated controversy with its proposal to launch a lending and financing platform on the Ethereum blockchain. The project's direct association with former President Donald Trump, a polarizing figure, raises expectations about the stablecoin and its impact on the cryptocurrency market. This can both attract additional risks and generate potential significant profits.
Stablecoins are essential assets in the cryptocurrency ecosystem. They provide a way to store valuables with price stability, which is advantageous in an often volatile market. These assets are also useful for trading in markets where access to US dollars is limited, serving as a bridge between cryptocurrencies and the traditional financial system.
The legality of stablecoins is still a topic of debate in the United States. The US Securities and Exchange Commission (SEC) has already sued companies, such as Binance, for issuing stablecoins, claiming that they were offerings of unregistered securities. However, stablecoin charges against Binance were dismissed by a federal judge earlier this year.
US elections
The possibility of Donald Trump being re-elected brings an additional dimension to the topic. The former president would be in a position to lead the White House while Congress evaluates regulation of a financial product he and his partners plan to offer.
At the same time, World Liberty Financial envisions creating substantial revenues from its stablecoin. The project therefore explores a strategy similar to that of banks. After all, banking institutions generate revenue by reinvesting customer deposits into yielding assets like U.S. Treasury bonds. In 2024, Tether, issuer of the market's leading stablecoin (USDT), achieved a record profit of US$5.2 billion in the first half of the year by adopting this approach.
To ensure its stablecoin achieves widespread adoption, World Liberty will need to establish partnerships with major cryptocurrency exchanges such as Coinbase and Binance. These platforms play an important role in making stablecoins available to a wide audience.