- The New York Times report raises alarm about Trump’s crypto pivot.
- Trump endorses the USD1 stablecoin, which former officials back.
- Lawmakers warn of national security and financial system risks.
President Donald Trump’s ongoing support for crypto assets, especially the USD1 stablecoin, continues to draw scrutiny from public commentators and media outlets. The New York Times recently published a report warning that while crypto may serve Trump’s interests, it could threaten U.S. financial security.
Notably, the GENIUS Act, which aims to regulate stablecoins, passed a key Senate hurdle this week amid growing debate.
Trump’s USD1 Stablecoin
At a private gathering of top holders of his TRUMP meme coin, Trump promoted USD1, a stablecoin issued by World Liberty Financial (WLFI), a company led by his former officials.
USD1 is backed 1:1 by U.S. dollar deposits and short-term Treasuries. Having launched in March, it has grown to over $2 billion in valuation, ranking as the fifth biggest in the market. WLFI plans to offer the stablecoin through a registered money services business.
National Security, Illicit Finance Fears Raised Over Politically Linked Stablecoinss
According to The New York Times, Trump’s crypto pivot is raising alarms among lawmakers and regulators who say it prioritizes political gain over national interests. The report highlights fears that stablecoins like USD1, especially when backed by politically connected figures, could sidestep financial safeguards.
Echoing the sentiment, Senate Banking Committee staffers and international watchdogs have warned that stablecoins may facilitate illicit finance, undermine sanctions, and allow hostile actors to influence U.S. markets without robust oversight.
Related: Trump-Linked USD1 Stablecoin Reaches $2.1 Billion Cap, Lands Binance Listing
GENIUS Act Advances but Critics Urge Caution
Meanwhile, the Genius Act, spearheaded by Senators Kirsten Gillibrand and Cynthia Lummis, passed on Monday with a 66–32 Senate vote. Fifteen Democrats sided with Republicans to advance the legislation, setting the stage for a final vote.
The Act proposes that the U.S. Treasuries or comparable cash-equivalent assets entirely back all stablecoins. Additionally, it sets AML protocols and mandates that issuers with a market capitalization of over $50 billion register and undergo regular audits.
Related: Trump’s World Liberty Buys 3.64 Million EOS Tokens in $3M USDT Purchase
Notably, supporters say the act is key to preserving U.S. leadership in digital finance. However, Democratic lawmakers, such as Senator Elizabeth Warren, have voiced concerns over potential conflicts of interest.
There’s also concern that widespread adoption could pressure the government into future bailouts if tokens linked to banks or retail users collapse.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
