Key Takeaways
- Elizabeth Warren has criticized the Trump-linked WLFI stablecoin.
- The key Democrat called up senators to abolish the upcoming stablecoin regulation.
- Sen. Warren warned that USD1 has links to shady crypto deals in the UAE.
Senator Elizabeth Warren, a vocal critic of Donald Trump and his policies, is now targeting the USD1 stablecoin launched by Trump’s affiliated decentralized finance company World Liberty Financial (WLFI).
Launched in March, the WLFI stablecoin has broken into the top 10 stablecoins by market capitalization. Thanks to its Binance deal, the $2 billion transaction will be settled in the USD1 stablecoin.
Warren Warns of USD1 Stablecoin’s UAE Links
In an X post on Monday, Sen. Warren wrote that Trump backed WLFI’s stablecoin surged to 7th largest in the world due to its shady deals with the UAE government.
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She urged the Senate not to pass the upcoming stablecoin regulation that could legalize the use of private stablecoins for traditional businesses.
“The Trump family stablecoin surged to the 7th largest in the world because of a shady crypto deal with the United Arab Emirates—a foreign government that will give them a crazy amount of money. The Senate shouldn’t pass a crypto bill this week to facilitate this corruption.”
The USD1 stablecoin was selected as the token for the $2 billion settlement deal between Binance and the UAE’s MXG. Warren believes the involvement of a Trump-backed company in the agreement creates a conflict of interest.
Warren believes Trump’s position as president gives the crypto company, WLFI, an undue advantage and an upper hand in the market, given Trump’s several pro-crypto policies that could lead to insider trading.
Earlier, Warren also raised concerns over Trump’s official meme coin and his ties to WLFI, claiming the president’s direct link to these crypto tokens and companies is a big concern.
Two Stablecoin Bills Await Floor Test
The United States is currently gearing up to pass comprehensive stablecoin regulations.
Warren refers to the two stablecoin bills awaiting a floor vote after passing the Senate Banking Committee last month.
Many people who know about the bill claim that the GENIUS Act and the STABLE Act will be merged to remove any key differences in their proposal, and a final bill will be passed into law in the coming months.
These bills focus on ensuring stability, transparency, and consumer protection in the stablecoin market. Key aspects include licensing requirements for issuers, reserve backing mandates, and oversight by either federal or state regulators.
The current legislative proposals mainly focus on payment stablecoins, which are designed for use as a medium of exchange.
A core principle of these proposals is the requirement for stablecoins to be fully backed by high-quality reserves, typically U.S. dollars or other highly liquid assets.
This ensures that the value of a stablecoin is maintained in a 1:1 ratio to the underlying asset.
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