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What Is USD1 Stablecoin Launched by the World Liberty Financial (WLFI)?
Beginner
2025-07-17 | 15m
USD1 is a fully fiat-backed stablecoin launched in March 2025 by World Liberty Financial (WLFI), an organization affiliated with Donald Trump. It aims to provide a zero-fee, institution-grade alternative to offshore stablecoins.
As stablecoins become critical infrastructure in crypto payments, trading, and DeFi, USD1 enters the market with a unique combination of regulatory compliance, high-speed settlements, and bold ideological positioning. Publicly endorsed by Donald Trump and backed by short-term U.S. Treasuries held in BitGo Trust, the token quickly gained traction with over $2.1 billion in market cap.
This guide explores what USD1 is, who created it, how it works, and what makes it different from other stablecoins on the market.
What Is USD1 Stablecoin?
USD1 is a fiat-backed stablecoin launched in March 2025 by World Liberty Financial (WLFI), a crypto platform co-founded by Donald Trump Jr., Eric Trump Jr., and Zach Witkoff. The token is pegged 1:1 to the U.S. dollar and is live on
Ethereum and BNB Chain, and
TRON.
Each token is fully backed by short-term U.S. Treasuries, insured dollar deposits, and high-liquidity equivalents. Reserves are held by BitGo Trust Company, a U.S.-regulated custodian that provides monthly third-party attestations.
Minting and redemption are processed through BitGo and typically settle in one to two business days. WLFI charges no fees for these operations, making USD1 especially attractive to institutions.
With public endorsements from Donald Trump and a leadership team drawn from his family, USD1 positions itself as a politically branded, regulation-aligned alternative to offshore stablecoins.
Key Features of USD1
• 1:1 Fiat Backing: Fully collateralized by short-term U.S. Treasuries, cash, and high-liquidity equivalents
• Zero Mint and Redemption Fees: Institutions can issue or redeem USD1 without additional cost
• Multi-Chain Support: Available on Ethereum, BNB Chain, and TRON for broad compatibility
• Fast Settlement: Mint and redeem operations usually complete within 1 to 2 business days
• Politically Positioned: Marketed as an America-first stablecoin with direct Trump family involvement
Why Is USD1 Gaining Traction in 2025?
Stablecoins are no longer just backend tools for traders. They are becoming critical infrastructure for payments, DeFi, and digital banking. In this rapidly evolving landscape, USD1 has emerged as one of the fastest-growing stablecoins of the year, driven by strong ecosystem support, multi-chain expansion, and a wave of political and institutional momentum.
WLFI’s Growing Influence Is Fueling USD1’s Rise
USD1’s popularity is closely tied to the rise of World Liberty Financial (WLFI), a fast-growing crypto banking platform launched in 2024. Inspired by Donald Trump and his family, WLFI merges the strength of the U.S. dollar with blockchain infrastructure to offer transparent and high-speed financial services.
The project gained additional momentum in early 2025 following the introduction of the
GENIUS Act, a policy initiative aimed at promoting American-led stablecoin innovation. This act reinforced public and institutional confidence in USD1’s regulatory alignment and long-term viability.
As of July 2025, WLFI manages over $181 million in crypto assets, with holdings in Ethereum, TRON, Wrapped Bitcoin, and DeFi protocols like
Aave. USD1, its flagship stablecoin, surged in adoption after a June airdrop that distributed 2.1 million tokens to more than 25,000 wallets.
WLFI is now preparing to make its governance token WLFI tradable and is developing a mobile app to improve access for retail users. The combination of political support, capital investment, and multi-chain infrastructure has helped push both WLFI and USD1 into the crypto mainstream.
BUILDon: The Memecoin Layer Powering USD1’s Ecosystem
To expand USD1 beyond basic payments, World Liberty Financial (WLFI) launched BUILDon, a memecoin and infrastructure protocol built on BNB Chain. While USD1 provides the stable foundation, BUILDon serves as a utility layer that powers
real-world asset (RWA) tokenization, smart contract applications, and ecosystem-level incentives.
BUILDon is designed to support decentralized finance and institutional integrations. It acts as both a governance token and a mechanism for community participation. By combining ideological branding with functional infrastructure, BUILDon plays a strategic role in extending the USD1 ecosystem.
Launching on TRON Expands USD1’s Global Reach
On June 13, 2025, USD1 officially launched on the TRON blockchain. The announcement was made by Eric Trump during TOKEN2049 Dubai and marked a key milestone in World Liberty Financial's multi-chain expansion. TRON currently processes over 30% of global stablecoin transfers and is known for its fast, low-cost transaction infrastructure.
By integrating with TRON, USD1 becomes more accessible to users in regions with high USDT on Tron adoption, including Asia-Pacific and the Middle East. The move also connects USD1 to a broader network of wallets, exchanges, and DeFi applications already built on the TRON ecosystem, making it easier to use stablecoin in everyday transactions and on-chain financial products.
The expansion reflects WLFI’s strategy to compete not only as a compliant, fiat-backed asset, but also as a politically branded stablecoin with real global reach. TRON’s scale gives USD1 the transactional velocity it needs to support both institutional use and retail utility, strengthening its position in the evolving stablecoin landscape.
How Does USD1 Work?
USD1 is designed to function as a fully redeemable stablecoin with a straightforward reserve-backed model. For every USD1 token in circulation, there is an equivalent U.S. dollar or cash-equivalent asset held in custody.
• Short-term U.S. Treasury bills
• Regulated U.S. bank deposits
• High-liquidity cash equivalents like overnight repo agreements
All mint and redemption operations are handled through BitGo Trust Company. To mint USD1, users wire U.S. dollars to a designated account, and BitGo issues the corresponding tokens. To redeem, tokens are burned and the equivalent fiat is returned. Settlement typically takes one to two business days, and WLFI charges no fees for either action.
Unlike algorithmic stablecoins like FRAX or overcollateralized stablecoins like
DAI, USD1 offers a simple, low-risk structure that prioritizes liquidity, transparency, and regulatory alignment. Its clean mechanics and predictable settlement process make it especially attractive for institutions seeking stable, compliance-ready infrastructure. BitGo also enables wallet-level controls such as freezing and fund recovery, supporting operational safeguards and institutional legal compliance.
When Is the USD1 Airdrop and Who Is Eligible for It?
Most stablecoins launch through institutional minting or on-chain liquidity programs, while Airdrops are typically reserved for governance or meme tokens. But in April 2025, World Liberty Financial (WLFI) took an unconventional approach by proposing an airdrop for USD1, its fiat-backed stablecoin. The campaign went live in May, aiming to reward existing WLFI holders and test the stablecoin’s distribution infrastructure at scale.
Eligibility Criteria for the USD1 Airdrop
To qualify for the airdrop, users first needed to hold WLFI tokens. These tokens can be acquired through:
• Decentralized exchanges
(
DEX
) such as Uniswap (Ethereum) or PancakeSwap (BNB Chain), depending on WLFI's network deployment.
• Direct participation in World Liberty Financial (WLFI) initiatives, which may include
staking programs, community events, or early ecosystem engagement.
When Is the USD1 Airdrop?
Snapshot Date
A snapshot was taken on
May 14, 2025, capturing all wallets that held WLFI tokens at that specific time. This snapshot served as the eligibility cut-off for the USD1 distribution.
Automatic Distribution
There was no manual claim process.
• All eligible wallets received USD1 automatically.
• No sign-ups, KYC, or additional steps were required. This ensured a frictionless and transparent airdrop experience, aligned with WLFI’s emphasis on community-first participation.
Strategic Timing
The airdrop happened during a wave of momentum. Just days earlier, USD1 had been used in a $2 billion transaction between MGX, a UAE-based asset manager, and Binance. USD1’s market cap also crossed $2.1 billion. The airdrop helped solidify that growth, showing both technical capability and community alignment.
How the USD1 Launch Impacts the Wider Stablecoin Market
The launch of USD1 signals a shift in the stablecoin landscape. More than just another dollar-pegged asset, it blends regulatory alignment, political narrative, and early institutional use.
• Stablecoins are moving toward regulation: USD1 follows a growing trend of fiat-backed tokens designed for transparency and institutional use.
• Narrative now plays a bigger role: USD1 uses political branding as a strategy to stand out, reflecting how story and identity are becoming part of token design.
• Institutional adoption is being tested: USD1 was used in a $2 billion investment transaction involving MGX, a UAE-based asset management firm, and Binance, highlighting early demand from large financial entities.
• Core DeFi principles are being challenged: The token’s centralization and political alignment raise questions about neutrality and user control.
Final Take: A Stablecoin Reflecting a New Phase in Crypto
USD1 represents a new category of stablecoin that emphasizes regulatory alignment, institutional accessibility, and ecosystem-driven growth. With a fiat-backed structure, multi-chain support, and reserves held by a U.S.-regulated custodian, it is designed for secure, transparent, and large-scale use.
Its launch strategy includes a revenue-sharing model, wallet-level compliance controls, and public backing from high-profile figures. These elements reflect a growing trend toward stablecoins that prioritize structure, oversight, and alignment with regulatory expectations.
Rather than following the path of earlier decentralized stablecoins, USD1 introduces a different model focused on infrastructure readiness and policy compatibility. As the stablecoin sector continues to evolve, USD1 illustrates how digital dollars can take on new roles across payments, DeFi, and institutional finance.
FAQs on Risk and Controversies of USD1
As USD1 gains adoption across Ethereum, BNB Chain, and TRON, questions around its political ties, centralized structure, and revenue design have sparked debate. While it presents itself as a transparent, regulation-friendly stablecoin, critics argue that USD1 goes against the core values of decentralization.
1. Is USD1 Too Politically Tied to Trump?
USD1 is the first stablecoin openly connected to a political figure. It’s issued by World Liberty Financial (WLFI), co-founded by members of the Trump family, and publicly promoted by Donald Trump.
This level of political branding is rare in crypto and has led to concerns about neutrality. Some worry that a politically affiliated stablecoin could be used to push ideological agendas or fund future campaigns.
2. Is USD1 Really a Decentralized Stablecoin?
USD1 presents itself as a transparent, regulation-friendly, and institution-ready stablecoin. However, its structure places meaningful control in the hands of its issuer. World Liberty Financial oversees all minting, redemption policies, and reserve management. BitGo, as the regulated custodian, has the authority to freeze or recover wallets when required. These features are intended to ensure compliance and operational safety, especially for institutional use.
At the same time, this level of centralization marks a departure from the permissionless, user-controlled design that has defined many stablecoins to date. USD1 reflects a shift toward a more institutional model of crypto finance, one that trades decentralization for control, and neutrality for ideological alignment.
3. Where Does the USD1 Profit Go?
Up to 75% of profits from USD1 operations go into a treasury wallet controlled by WLFI’s core team. Critics say this revenue-sharing model lacks transparency and could be misused for personal or political gain.
The concern is that USD1 isn’t just a stablecoin, but also a tool for consolidating capital and influence in the hands of its backers.
CoinCatch Team
Disclaimer:
Digital asset prices carry high market risk and price volatility. You should carefully consider your investment experience, financial situation, investment objectives, and risk tolerance. CoinCatch is not responsible for any losses that may occur. This article should not be considered financial advice.
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