Five Democratic senators have urged regulatory leaders to examine potential conflicts of interest linked to a stablecoin introduced by World Liberty Financial (WLFI), a cryptocurrency company associated with Donald Trump’s family.
In a letter dated March 28, Massachusetts Senator Elizabeth Warren and four of her Democratic colleagues addressed Michelle Bowman, the chair of the Federal Reserve’s Committee on Supervision and Regulation, as well as Rodney Hood, the acting comptroller of the currency. They sought clarity on how WLFI and its stablecoin, USD1, would be regulated.
This correspondence comes as Congress contemplates new legislation aimed at regulating stablecoins through the proposed Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act). Should it become law, the bill would empower the Office of the Comptroller of the Currency and the Federal Reserve to oversee the regulation of stablecoins, including those issued by WLFI.
In February, Trump also signed an executive order that directed federal agencies, presumably including the OCC, to “regularly consult with and coordinate policies and priorities” with White House officials, which would grant the president a significant amount of control.
The letter expressed concerns about Trump’s role in this venture, particularly as he undermines the independence of financial regulators while Congress takes up stablecoin legislation. It warned of significant risks to the financial system and the integrity of decisions made by the Federal Reserve and the OCC, stating:
“The launch of a stablecoin directly tied to a sitting President who stands to benefit financially from the stablecoin’s success presents unprecedented risks to our financial system.”
Since its inception in September 2024, merely months before the U.S. election and Trump’s inauguration, many of WLFI’s objectives have remained unclear. The project’s website indicates that Trump and some family members own 60% of the company.
As of mid-March, WLFI had successfully completed two public token sales, raising a total of $550 million. On March 24, the project announced the launch of its first stablecoin on the BNB Chain and Ethereum. Additionally, Trump’s son, Donald Trump Jr., promoted USD1 at the DC Blockchain Summit on March 26 alongside three co-founders of WLFI.