WLFI applies for a US banking license! Trump's family USD1 stablecoin compliance or privilege?

WLFI (World Liberty Financial) applies for a national charter from the Office of the Comptroller of the Currency (OCC), intending to establish a trust bank to issue USD1 stablecoin. Trump is listed as an “Honorary Co-Founder,” with his three sons as co-founders, and some equity held by the Trump family, raising questions about conflicts of interest.

The Political Benefits Behind Trump Family’s USD1 Stablecoin Doubling in Market Cap

WLFI stated in a press release that if approved by the OCC, World Liberty Trust Company will directly issue a USD1 stablecoin pegged to the US dollar. The company will also provide custody and stablecoin conversion services, “enabling other stablecoin holders to convert to USD1.” Additionally, the trust bank will allow clients to mint and redeem USD1.

According to an earlier report by the Financial Times, WLFI generated $550 million in revenue from selling WLFI governance tokens, with USD1 stablecoin sales reaching $2.71 billion. While stablecoin sales do not immediately translate into profits (as reserves must be held), if the proceeds are used to purchase short-term US bonds, World Liberty Financial could earn approximately $40 million in interest and fees from its holdings.

USD1’s growth rate in the first year surpasses that of any other stablecoin in history. WLFI co-founder Zack Witkoff stated: “Institutions are already using USD1 for cross-border payments, settlement, and fund management. The national trust charter will enable us to integrate issuance, custody, and conversion under a highly regulated entity, providing full-stack services.” If approved by the OCC, he will become the president and chairman of this trust bank.

The political benefits behind this rapid growth are obvious. After taking office, Trump immediately pushed for cryptocurrencies to enter the mainstream. SEC Chair Gensler resigned on his first day, and Trump appointed crypto advocate Paul Atkins as his replacement. Since then, the SEC has settled or reached agreements in cases involving donors to the presidential inauguration, including Coinbase and Ripple Labs. The GENIUS Act signed by Trump provides a federal regulatory framework for stablecoins, and WLFI is one of the biggest beneficiaries under this framework.

The Power and Controversy of OCC Banking Licenses

The OCC has issued charters to several crypto companies, allowing them to operate trust banks. During President Biden’s administration, federal banking regulators were cautious about approving banks to provide crypto-related services, but since Trump took office last January, attitudes toward the digital asset industry have shifted. The OCC, led by Trump appointee Jonathan Gould since last summer, has adopted a crypto-friendly stance.

WLFI’s timing in applying for a banking license is highly strategic. Under the leadership of the OCC, appointed by Trump, the crypto-friendly policies have been fully rolled out. This close relationship between politics and business has sparked significant controversy. Critics point out that the Trump family is both policymaker and direct beneficiary, creating an unprecedented conflict of interest in modern American history. Former presidents like Jimmy Carter entrusted peanut farms to blind trusts, and George W. Bush sold his Texas Rangers shares before taking office, but Trump directly owns and promotes crypto businesses during his term.

The strategic significance of WLFI’s application for a national trust bank license is substantial. Once granted a federal license, USD1 will enjoy the same regulatory status and market trust as traditional banks. The press release states that the trust company “plans to serve institutional clients, including crypto exchanges, market makers, and investment firms.” This suggests USD1 could become a primary settlement currency on exchanges, directly competing with USDT and USDC.

If USD1 successfully penetrates the institutional market, its market cap could reach hundreds of billions or even trillions of dollars within a few years. This would generate enormous interest income for the Trump family (assuming $2.71 billion in stablecoin sales invested in US bonds at a 4% annual yield, yielding about $108 million annually). More importantly, controlling stablecoin issuance equates to holding the “minting rights” in the crypto world, representing the ultimate form of financial power.

List of Crypto Banks Approved by the OCC

Circle: USDC issuer, granted a national trust bank charter

Ripple: XRP developer, authorized to provide custody and payment services

Fidelity Digital Assets: Crypto subsidiary of a traditional financial giant

BitGo: Professional custody service provider

Paxos: Issuer of BUSD and PYUSD

Conflicts of Interest and Regulatory Arbitrage Gray Area

Currently, US stablecoins are generally under the jurisdiction of the GENIUS Act signed into effect last year by Trump, but specific regulatory provisions are still being formulated by federal agencies including the US Department of the Treasury. How stablecoin yields are handled is also a topic in ongoing legislative negotiations on crypto market structure. Legislators are scheduled to vote on the Market Structure Bill next Thursday, but some issues remain unresolved.

This “Trump sets the rules and also plays the game” model has raised serious questions. Most of Trump’s crypto investments are managed through revocable trusts controlled by Donald Trump Jr., with the White House claiming that such trusts protect the president from improper conduct. However, unlike most former presidents who placed their assets in “blind” trusts managed by independent institutions with no reporting to the original owners, Trump is the sole beneficiary of his trust, which he can access after leaving office.

WLFI’s application for a national trust bank license would move Trump’s crypto business from the “gray area” into the “legitimate domain.” However, this legalization process itself is highly controversial. When a company owned by the president’s family applies for a license from a regulator appointed by the president, how can the fairness of the approval process be guaranteed? Is there regulatory arbitrage? These questions have sparked intense debate in Congress and the media.

Additionally, WLFI’s application faces technical and market challenges. Although USD1 is growing rapidly, its market cap of $2.71 billion is still far below USDT (about $140 billion) and USDC (about $50 billion). The stablecoin market has strong network effects, making it difficult for latecomers to displace established giants. Unless USD1 offers unique value—such as higher yields, faster settlement speeds, or government-backed implicit guarantees—it will be hard to expand on a large scale.

For the crypto industry, WLFI’s bank license application marks a watershed event. If approved, it will demonstrate that political background plays a decisive role in crypto regulation. If rejected, it will show that the US regulatory system still maintains a certain independence. Regardless of the outcome, this case will become a classic example for studying the relationship between politics and business, regulatory capture, and conflicts of interest.