YEREVAN (CoinChapter.com) — Concerns Raised Over President Donald Trump’s Involvement in USD1 Stablecoin Project
Concerns have been raised over President Donald Trump’s involvement in the USD1 stablecoin project, backed by World Liberty Financial (WLF). A group of U.S. Senators, led by Elizabeth Warren, has questioned whether Trump’s ties to the project could lead to regulatory favoritism. They have urged the Federal Reserve and the Office of the Comptroller of the Currency (OCC) to clarify how they plan to handle potential conflicts of interest related to USD1.
Senators Seek Clarification on Stablecoin Approval Process
On March 28, 2025, Senator Elizabeth Warren and other lawmakers sent a letter to the Federal Reserve and the OCC, requesting clarification on how the agencies will address potential conflicts of interest regarding USD1. The Senators are concerned that Trump’s role in the project could influence the regulatory approval process. This follows the ongoing discussions around the GENIUS Act, a bill that would grant both the Fed and OCC significant authority over stablecoin regulation.
In the letter, the lawmakers raised concerns about the ability of a sitting president to influence the regulatory process for a project in which they have a financial interest. The senators pointed out that Trump could use his power to influence decisions that would benefit the USD1 stablecoin, which could compromise the fairness of the regulatory system.
Potential Influence on Federal Agencies
The Senators highlighted specific scenarios where Trump’s influence could affect the approval process for USD1. For example, they suggested that Trump might attempt to influence the OCC’s review of USD1 or discourage enforcement actions against WLF. Additionally, they pointed out that the President could attempt to pressure the Federal Reserve into offering emergency financial support to USD1 in times of market volatility, a move that might not extend to other stablecoins.
The Senators also raised the possibility that Trump could push the Fed to establish a master account at the central bank for WLF, potentially giving USD1 an advantage over its competitors.
Concerns Over the GENIUS Act’s Lack of Safeguards
The Senators also noted that the GENIUS Act lacks provisions to prevent conflicts of interest. They argued that the absence of safeguards in the bill would allow Trump to use his presidential influence to benefit financially from USD1. This situation could lead to regulatory favoritism, which would undermine public trust in the regulatory process.
The lawmakers have requested that both the Fed and OCC clarify their plans to address these issues. They want to know how the agencies will manage the approval process for USD1. Additionally, they seek clarification on how the agencies will handle potential liquidity support during financial crises. Moreover, they want assurance that WLF’s business practices will be properly overseen. These concerns are crucial to ensuring regulatory integrity.
The Federal Reserve and OCC must respond by April 11, 2025. Elizabeth Warren, Ron Wyden, Chris Van Hollen, Jack Reed, and Cory Booker signed the letter.
This situation raises key questions about the risks of a sitting president profiting from a project regulated by federal agencies. The Fed and OCC will shape the future regulation of stablecoins with their responses.