Trump family’s crypto-linked stablecoin project sparks debate on financial stability and conflict of interest
Eric Trump, son of US President Donald Trump, argued that stablecoins could strengthen the role of the US dollar in global markets. His remarks come as the Trump-backed project, World Liberty Financial (WLFI), faces scrutiny in Washington.
Stablecoins as a lifeline for the dollar
In a recent interview, Eric Trump said he believes stablecoins will “save the US dollar,” pointing to USD1, a stablecoin tied to his family’s crypto venture. He suggested that tokenized dollars could help preserve the greenback’s strength at a time of shifting global financial dynamics.
Financial law experts, however, caution that the overlap between the Trump administration and WLFI raises new risks. Attorney Andrew Rossow noted that a president’s direct involvement in a stablecoin is “a direct affront to constitutional safeguards meant to prevent conflicts of interest.”
Conflict of interest questions
Since WLFI was revealed earlier this year, lawmakers have voiced concerns. Five Democratic senators warned that a sitting president holding a financial stake in a stablecoin poses “unprecedented risks to the financial system.”
Representative Maxine Waters went further, suggesting the administration could push government agencies to use USD1 for payments — ranging from tax collections to Social Security disbursements. Critics argue such a scenario could blur the line between public policy and private gain.
Regulation and market impact
Despite concerns, the administration advanced regulation through the GENIUS Act, signed into law in July, which established new rules for stablecoin issuance. Supporters argue this legislation could boost American leadership in digital assets.
Federal Reserve Governor Christopher Waller previously stated that stablecoins “will broaden the reach of the dollar across the globe and make it even more of a reserve currency than it is now.” Similarly, Bryan Pellegrino, CEO of LayerZero Labs, described stablecoins as “the best tool for the US government to maintain the dollar’s dominance.”
Still, not everyone agrees. European asset manager Amundi cautioned that new US rules may backfire, potentially undermining long-term dollar supremacy.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.