- Donald Trump has come under fire recently over conflicts of interest with the World Liberty Financial stablecoin, USD1.
- According to California Representative Maxine Waters, the US president is attempting to replace the US dollar with a family-issued stablecoin.
A heated debate erupted in the US Congress this week over a crypto-related issue and Donald Trump. According to California Representative Maxine Waters, the US president is attempting to replace the US dollar with a stablecoin issued by World Liberty Financial (a company backed by his family). Here are the details of the controversy and what it means for the crypto space.
Conflicts of Interest and Political Concerns
Waters, the Donald Trump accuser, is the ranking member of the U.S. House Financial Services Committee. She made this explosive claim during the 2 April congressional hearing, in which she argued that Donald Trump has used his influence to promote various crypto ventures, including the USD1 stablecoin, which WLFI launched in March.
Waters also pointed out that the stablecoin represents a dangerous conflict of interest for Donald Trump, as the president is responsible for shaping policies that benefit his financial interests at the expense of the American public.
Waters didn’t hold back in her remarks, stating that Trump likely sees a future in which the US government conducts transactions using stablecoins—potentially his own.
She claimed that federal agencies like the Department of Housing and Urban Development and the Social Security Administration could be forced to use USD1 for payments. She also raised concerns about the possibility of tax payments being processed through Trump-backed crypto assets.
As it stands, her concerns are also shared by other lawmakers, including the House Financial Services Committee Chair, French Hill. Hill backed Waters’s accusations, stating that Trump’s involvement in stablecoins complicates legislative efforts.
His involvement also makes it more difficult to establish a clear regulatory framework. Waters warned that she would not support any new stablecoin legislation unless measures are put in place to prevent Trump (or any sitting president) from having direct stakes in how these projects are run. She also urged her colleagues to not to “be enablers” of what she calls a “serious ethical breach”.
Trump’s Growing Crypto Footprint
Trump’s involvement in the crypto space extends far beyond mere stablecoins. Earlier this year, the US president launched his meme coin called TRUMP. This memecoin quickly gained attention within the market and was already a widely accepted payment method for online marketplaces selling TRUMP merchandise within a few weeks.
The token has seen a dramatic rise in market cap and is now among the top 30 cryptocurrencies by market cap. This, in some ways, shows Waters’s concerns about the president’s ability to influence the digital asset space. More than memecoins and stablecoins even, Trump has taken steps toward integrating crypto into national policy.
For example, he signed an executive order in March to create a national reserve for digital assets. The said reserve is expected to contain as many as 200,000 BTC, which have been seized by U.S. authorities in criminal proceedings.
What’s Next for Stablecoin Legislation?
The House Financial Services Committee is now considering amendments to the STABLE Act. One of the major bills under review seeks to prevent the US government from issuing a CBDC and has been supported by many lawmakers who believe that private stablecoins should remain dominant as digital assets.
The recent hearing and the Trump accusations are a necessary step, to make sure that the committee can vote on whether to advance these bills to the House of Representatives.
