US Treasury Secretary Scott Bescent was insightful today by the House Financial Services Committee on Representatives and Trump’s World Liberty Financial (WLFI) and its new USD1 stubcoin.
Congressional Democrats questioned Bescent whether profitless stubcoins that are not linked to Trump’s crypto venture could hide hidden grants.
Bescent is scrutinized through President Trump’s global free finance
Founded in 2024 with close ties with the Trump family, World Liberty Financial raised approximately $550 million in the second half of 2024 by selling governance tokens. The Trump family is entitled to make up about 75% of their net revenue.
In March, WLFI launched USD1. This is a dollar peg token supported by the US Treasury Department and cash equivalents.
Within weeks, Abu Dhabi’s provincial MGX agreed to roll out $2 billion USD1 to Vinance, and by market capitalization USD1 was immediately pushed into the top tier of Stablecoins.
At a 4% market rate, Rep. Brad Sherman pointed out that the deal effectively grants WLFI and its Trump owners a $80 million annual grant. He asked if this “interest-free loan” should be counted as hidden support.
“Abu Dhabi has announced that it will provide $2 billion to Stablecoin, proposed by World Liberty Financial. It will not pay interest. So you and I are both fundraising people. I just want to check my maths, Sherman said.
To his knowledge, Bessent said it had not reviewed the token’s expense ratio and insisted that Stablecoins would not pay interest. He added that regulators have not formally labeled such purchases as hidden grants.
Lawmakers warned that the structure could mask political favor. They urged the Treasury to make it clear when Stablecoin violates inappropriate support.
The hearing was caught up in an investigation by the New York Times. The report reveals a multi-million dollar “approval” pitch under the Trump name, sales to foreign companies, and a policy shift that will benefit WLFI.
WLFI said it has crossed the boundaries of private companies and government policies without precedent.
“In a statement, a spokesperson for President Trump pointed out that his assets lie in the trust he manages by his children. As a result, there is no conflict of interest. Trust still benefits President Trump directly,” the NY Times report argued.
Democrats on the committee said they would pursue laws that require full cost-effective disclosure for stable ones. They also want to ban profitless structures that serve as de facto subsidies.
They argue that such rules are essential to ensure transparency and prevent conflict when politically connected companies enter the crypto market.
Beincrypto reached out to the free finance of the world to understand their stance on such allegations and scrutiny.
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
