- Trump family's purported DeFi project does custody deal with BitGo.
- Stablecoin will be backed by dollars and US bonds.
World Liberty Financial, the Trump family’s purported DeFi project, has long hinted that it plans to issue a stablecoin to compete with market giants Tether and Circle.
Those plans became more concrete on Tuesday after the project released details of the stablecoin in a blog post.
The dollar-pegged token, called USD1, will be backed by short-term US government treasuries, US dollar deposits, and other cash equivalents.
“Each token is intended to maintain a value of $1 USD, fully backed by a reserve portfolio audited regularly by a third-party accounting firm,” the post said.
BitGo deal
USD1 will be custodied by BitGo, the firm that issues some $11 billion worth of Wrapped Bitcoin.
Wrapped Bitcoin — or WBTC — is the biggest DeFi-compatible version of Bitcoin in the crypto market.
World Liberty Financial did not respond to a request for comment.
The news comes after several onchain transactions over the past week appeared to show testing for a USD1 token.
A wallet belonging to crypto market maker Wintermute was among those conducting the tests.
Wintermute CEO Evgeny Gaevoy did not return a request for comment.
World Liberty Financial is a planned DeFi protocol built on top of Ethereum and its smart-contract network.
Future revenues
While the project isn’t owned by President Donald Trump, he and his three sons promote it, own substantial amounts of its WLFI token, and will receive some of its future revenues.
World Liberty Financial hasn’t launched, but documentation for the project says it will let users lend and borrow crypto assets like Ether.
USD1 tokens will initially be minted on the Ethereum and BNB Chain blockchains.
World Liberty Financial said BitGo’s prime brokerage service will also support USD1 — providing institutional clients with access to the planned stablecoin.
BitGo has become a contentious company in DeFi circles in recent months.
In October, BitGo transferred control of WBTC to a joint venture with crypto custody platform BiT Global.
BiT Global has links to Tron founder Justin Sun. Detractors allege Sun is tied to the TrueUSD stablecoin through a China-based conglomerate called Techteryx.
In 2023, Techteryx took control of TrueUSD. Since then, TrueUSD’s previous management team resigned, the firm suspended its real-time proof of reserves, and the stablecoin lost its peg several times after interruptions to its redemption service.
Sun has denied any involvement with TrueUSD or Techteryx.
‘Safety and legality’
Sun became one of the biggest holders of World Liberty Financial’s WLFI governance token after buying $75 million worth earlier this year.
In December, BiT Global accused Coinbase in a lawsuit of delisting WBTC to make way for its own wrapped version of Bitcoin, called cbBTC.
Coinbase denied the allegations and has moved to dismiss the suit in San Francisco. The crypto exchange argued that Sun’s undefined role in BiT Global and WBTC violated the “safety and legality” standards it employs to vet cryptocurrencies available on the exchange.
“He has repeatedly been accused of, investigated for, and sued for financial misconduct,” attorneys for Coinbase wrote in court papers.
“Reports of his alleged misdeeds abound in the press and crypto community more broadly.”
A lawyer representing BiT Global previously told DL News the firm intends to prove the case through trial. Sun previously declined to comment on Coinbase’s allegations.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
