What Is USD1?

In 2025, a stablecoin named USD1 (World Liberty Financial USD) quickly emerged in the evolving cryptocurrency market. Launched by World Liberty Financial (WLFI) with support from the family of former U.S. President Trump, USD1’s core selling points include compliance, multi-chain ecosystem, and institutional-grade applications. Its market value exceeded $2.1 billion within two months of launch, ranking it as the seventh largest stablecoin globally. This article will delve into the design logic, market performance, and the impact of USD1 on the cryptocurrency ecosystem.

The core positioning of USD1: institution-grade stablecoin driven by compliance

USD1 is a fiat-backed stablecoin pegged 1:1 to the US dollar, fully supported by short-term US Treasury bonds, USD deposits, and cash equivalents, aiming to provide a secure and transparent digital dollar tool for institutional investors and sovereign wealth funds. Its core features include:

1. Zero casting and redemption fees: Unlike traditional stablecoins, USD1 exempts casting and redemption fees, reducing user conversion costs, especially attracting high-frequency traders and institutional funds.
2. Institutional-grade custody and regulatory compliance: Custody of reserve assets by BitGo Trust Company regulated by South Dakota and transparency ensured through third-party audits. BitGo’s involvement not only strengthens compliance but also provides liquidity support through its Prime brokerage services.
3. Multi-chain deployment and ecosystem integration: initially deployed on Ethereum and BNB Chain, then expanding to Tron, covering the mainstream public chain ecosystem. 99% of USD1 circulation is concentrated on BNB Chain, deeply integrated with the BNB Chain ecosystem.

Technical architecture

The technical design of USD1 emphasizes verifiability and risk control, adopting industry-leading security mechanisms:

1. Reserve Asset Dynamic Management: The reserve portfolio includes short-term US Treasury bonds (≤ 93 days) and highly liquid cash assets, managed by institutions such as Fidelity Investments, ensuring instant redemption capability.
2. Transparent verification tool: Introducing Chainlink Proof of Reserves (PoR), real-time on-chain verification of asset reserves; Smart contracts audited by Peckshield, and operational risks reduced through a multi-signature mechanism.
3. Compliance Framework: Strictly adhere to the requirements of the U.S. GENIUS Act, including Anti-Money Laundering (AML) and user fund segregation system, to avoid risks of TerraUSD-style collapse.

Market performance

The rise of USD1 can be described as phenomenal, and its growth relies mainly on large-scale institutional cooperation rather than retail-driven:

1. Abu Dhabi’s $2 billion investment: Abu Dhabi investment firm MGX uses USD1 to invest $2 billion in Binance, directly boosting its market value and validating its utility in cross-border settlements.

2. DeFi ecosystem is rapidly penetrating: cooperating with top protocols such as Venus Protocol, StakeStone, supporting collateral, lending, and liquidity mining. In PancakeSwap On top of that, the 24-hour trading volume of USD1 reached 4.6 million US dollars, making it one of the core stablecoins of BNB Chain.

3. Exchange and payment scenarios landing: Accessing Pundi X payment terminals to cover offline consumption scenarios in emerging markets such as Southeast Asia. USD1 will be launched on Gate Exchange at 23:00 on May 28, 2025, Beijing time, directly expanding the usage scenarios of USD1.

Controversy and challenges

Despite the rapid growth of USD1, its Trump family background has also sparked controversy:

1. Conflict of interest questioned: The Trump family holds 60% of the shares through WLFI and receives 75% of the profits, while the U.S. government is simultaneously promoting the “GENIUS Act,” criticized as being “both judge and contestant” at the same time.
2. Market volatility risk: Previously, the Meme coin TRUMP launched by the Trump family plummeted by 80%, causing concerns in the market that USD1 may experience confidence fluctuations due to political factors.
3. Regulatory Uncertainty: The Democratic Party withdrew its support for the stablecoin bill due to corruption concerns, casting a shadow over the prospects of the bill and potentially affecting the long-term compliance of USD1.

Outlook for the Future

The ambition of USD1 is not limited to the crypto market. WLFI plans to further expand into traditional financial systems, including integrating with retail POS systems, and deepening cooperation with sovereign funds. In addition, its multi-chain expansion strategy (such as the upcoming integration with Tron) will enhance cross-chain liquidity and consolidate its infrastructure position in DeFi.

On May 28, 2025, at 23:00, USD1 will be listed on Gate Exchange to provide a trading entry for more users. This move may further drive its market value up, even challenging the leading positions of USDC and USDT. The rise of USD1 marks the entry of the stablecoin market into a new stage of compliance and politically driven resources. Despite facing regulatory and trust challenges, its institutional design, ecosystem integration capabilities, and the influence of the Trump family make it an undeniable force in the crypto market. In the future, whether USD1 can balance commercial ambitions with public interests will determine whether it can truly reshape the landscape of digital dollars.