The launch of USD1, a U.S. dollar-pegged stablecoin by World Liberty Financial (WLFI), a cryptocurrency platform linked to President Donald Trump’s family, is raising concerns in Congress.
The launch of USD1, a U.S. dollar-pegged stablecoin by World Liberty Financial (WLFI), a cryptocurrency platform linked to President Donald Trump’s family, is raising concerns in Congress. The stablecoin, introduced in March, comes as lawmakers work on stablecoin legislation, and some worry it could complicate bipartisan efforts to pass regulatory frameworks. While some see the launch as a positive move for crypto adoption, others are worried about potential conflicts of interest due to Trump’s family’s involvement.
Democrats, including Senator Elizabeth Warren, have criticized the project. Warren referred to USD1 as a “grift,” suggesting that any legislation benefiting stablecoin issuers could financially benefit Trump’s family. Critics fear that the passage of such bills could be seen as aligning with Trump’s interests, which might lead to delays or stricter regulations on the stablecoin market. At the same time, proponents argue that USD1’s characteristics align with key elements in the current proposed legislation.
Anastasija Plotnikova, co-founder of blockchain regulatory firm Fideum, noted that USD1 meets the criteria laid out in both the STABLE Act and the GENIUS Act. These two bills are designed to establish clearer regulations for stablecoins. The STABLE Act, introduced in February, aims for greater transparency and consumer protection, offering issuers the option to be regulated by either federal or state authorities. Meanwhile, the GENIUS Act, which passed the Senate Banking Committee in March, focuses on Anti-Money Laundering compliance and collateralization rules for stablecoins.
However, Trump’s increasing involvement in the crypto sector, including meme coins, NFTs, and Bitcoin mining, is creating additional challenges for lawmakers. Rep. French Hill of the House Financial Services Committee remarked that Trump’s activities, especially related to stablecoins, are making it harder to pass meaningful legislation. As a result, critics worry that the growing political entanglement could delay efforts to pass the bills.
At the same time, there is bipartisan support for both stablecoin bills, with the GENIUS Act advancing through the Senate and the STABLE Act expected to be voted on by the House Financial Services Committee soon. Both bills aim to offer clarity for the stablecoin market but differ on how foreign issuers like Tether should be regulated. Rep. Bryan Steil, chair of the House panel on digital assets, indicated that while the bills are 80% similar, they still need to be reconciled before moving forward.
Despite concerns, stablecoin bills are moving toward final approval. However, Trump’s involvement is complicating the process, and some believe that the stablecoin debate may be delayed or influenced by political considerations. This ongoing issue highlights the tension between crypto innovation and regulatory oversight in the United States.
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