The decentralized finance protocol, World Liberty Financial (WLFI), which is supported by former U.S. President Donald Trump and his family, announced its intention to introduce a stablecoin backed by the U.S. dollar on Tuesday.
Dubbed USD1, this stablecoin is pegged to a value of $1 and will be entirely supported by short-term U.S. government securities, dollar deposits, and other cash-like assets. The reserves will be held at BitGo, while BitGo Prime, the company’s brokerage division, will manage the liquidity for the token.
The launch of the stablecoin will initially occur on Ethereum and BNB Chain, with plans to extend to additional networks in the future, according to the protocol.
This announcement follows attention from crypto watchers regarding test transactions involving a token named World Liberty Financial USD (USD1) on both Ethereum and BNB Chain, with BitGo and Wintermute, a market maker, participating in the transfers.
“USD1 offers what algorithmic and anonymous crypto ventures cannot—access to the capabilities of DeFi with the credibility and protections of well-respected figures in traditional finance,” stated Zach Witkoff, co-founder of WLFI. “We’re presenting a digital dollar stablecoin that sovereign investors and significant institutions can seamlessly integrate into their strategies for safe cross-border transactions.”
WLFI, a project led by Zachary Folkman and Chase Herro, garnered attention last year as one of the initial crypto initiatives receiving backing from Trump. The protocol aims to establish a blockchain-based marketplace for users to lend and borrow cryptocurrencies, create liquidity pools, and engage in stablecoin transactions.