Trump's USD1 Stablecoin Draws 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.

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 founded by his former officials. USD1 is backed 1:1 by U.S. dollar deposits and short-term Treasuries.

Having launched in March, USD1 has reached over $2 billion in valuation, placing it among the top five largest stablecoins. WLFI plans to offer the stablecoin through a registered money services business.

National Security, Illicit Finance Fears Raised Over Stablecoins Linked to Politicians

According to The New York Times, Trump’s crypto pivot is raising alarms among lawmakers and regulators. They 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 critical financial safeguards.

Moreover, 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 sufficient oversight.

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 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.

Significantly, supporters highlight the act as pivotal in preserving U.S. leadership in digital finance. However, Democratic lawmakers, such as Senator Elizabeth Warren, have expressed concerns over potential conflicts of interest.

There’s also worry that widespread adoption could pressure the government into future bailouts if tokens linked to banks or retail users collapse.