Two fundamentals underpin the business model of a new crypto bank partly owned by the Trump family, cryptocurrency experts tell the Guardian.
World Liberty Trust Company received conditional approval this month from the US office of the comptroller of the currency (OCC) to start a bank. An entity affiliated with Donald Trump and his family members owns about 38% of the company. The agency is led by a political appointee of the US president.
The first distinctive feature of this bank – and stablecoin operations like it – is that there is almost no risk that it can lose money. The second is the sole logical motivation for depositors to put their money into it, according to five experts: the financial connection to the president and his family.
World Liberty is not really a bank, in the conventional sense: it won’t be lending money to businesses or individuals, issuing mortgage or credit cards, or getting federal insurance on deposits.
What it will be able to do is directly issue the Trumps’ dollar-pegged stablecoin, USD1. Stablecoins, unlike other cryptocurrencies, are pegged at fixed values such as $1, and used almost exclusively to buy and sell riskier crypto assets, like bitcoin.
Because of the way stablecoins are regulated – under a law signed by Trump in 2025 – World Liberty’s bank will not be allowed to pay its depositors, the companies and individuals who buy its stablecoins, any interest. The bank, however, can earn interest for itself by putting the cash it collects from those depositors into high-quality liquid investments – US government-backed treasury bonds.
Why would depositors be interested in buying the Trump family’s little-used stablecoins? Experts point to their ties to the White House.
“The only reason really to do it is because they want to appease Trump, because they want to gain favor with Trump or in some way help Trump for whatever reason,” said James Angel, an associate professor at Georgetown University’s McDonough School of Business.
For a depositor in the bank, “this is a very efficient way to buy influence with the Trump gang”, he said.
World Liberty Financial insists that the charter approval means the company will be well supervised. “Critics are missing the point: World Liberty Financial is running towards regulation and continuous oversight, not away from it,” a company spokesperson said. “World Liberty Trust Company’s national charter will ensure robust and permanent regulatory supervision from the OCC, a federal banking regulator, that will outlast the Trump administration.”
The OCC argues that there is no corruption or insider dealing because the application was reviewed by “career staff”, not the agency official appointed by Trump.
Democrats have called the matter a stark example of corruption, pointing out that there has never been a case where a US president had an interest in a bank his own administration would approve and regulate.
At a White House event on Wednesday, Trump claimed that “new financial technologies” including crypto had been plagued by “crippling regulations, brutal restrictions, weaponization” in the US before his return to office.
USD1 was launched by World Liberty Financial in March 2025, two months after Trump re-entered the White House. About four months after that, the framework for stablecoin banks – the so-called “Genius Act” – was signed by Trump.
“I named it after myself,” Trump said at Wednesday’s event. The legislation helped pave the way “for widespread adoption of dollar-backed stablecoins”, he claimed. “And that’s worked out very well.”
The law, signed in July 2025, made it plain that stablecoin issuers could not pay interest, and would need to invest in things like cash, or short-term US government-backed treasury bonds.
Six months after the Genius Act, World Liberty filed its application to the OCC, making it clear that one of its objectives was “to drive mainstream adoption of USD1”.
When the OCC finally granted its approval this year, on 14 August, it dismissed complaints. “Approvals of applications such as this are made under authority delegated by the comptroller to career staff,” its letter said. “Career OCC staff reviewed the application for consistency with the statutory, regulatory, and policy requirements and factors for approval.”
Patrick Woodall, the managing director of Americans for Financial Reforms, said in a statement on the organization’s website that the OCC “exceeded its statutory authority and longstanding judicial precedent to unlawfully grant a conditional bank charter to a trust bank controlled by the Trump family crypto firm World Liberty Financial (WLF)”.
Jeremy Kress, a law professor and bank regulation expert at the University of Michigan’s Ross School of Business, said the bank approval was a clear coup for World Liberty. “President Trump controls the bank regulatory process,” he said. “He wanted a bank and so the bank regulators approved his bank. That’s, you know, unprecedented.”
In a statement, an OCC official said the agency “consulted with multiple experienced career government ethics officials” to ensure that the World Financial Liberty process “complied with all government ethics standards and policies”.
USD1 has a minuscule market share in the stablecoin industry. There are about $183bn worth of Tether coins in circulation, and over $70bn of Circle’s USDC.
USD1, by comparison, has only $4bn in circulation. There needs to be a reason for people to buy it.
A spokesperson for World Liberty argued that USD1 is widely used, and said that it had become the second largest stablecoin “in terms of market cap and trading volume” to comply with Trump’s Genius Act.
Tether, the market leader, is not in compliance with the Genius Act. And while USD1 is technically the second-most widely used Genius Act-compliant stablecoin, experts say it is still a minor fraction of the overall market.
USD1 did get some prominent White House billing during the UFC fight on the south lawn in June, when it was announced that some fighters would get paid bonuses in the currency.
But still, it’s an uphill battle. “I don’t see a good reason why anyone would want to use the Trump stablecoin when others are more commonly used,” said Angel, the Georgetown professor. “The only reason I can see to use this stablecoin is to curry favor with the Trump administration.”
Because the currency is so rarely used, there’s not much of a reason to buy it, five experts in crypto said. It offers no advantage, they say – except the links to Trump.
Kress, of the University of Michigan, said some depositors may do it because of the emotional commitment to Trump, or his broader Make America Great Again (Maga) movement. Others may do it as a way of simply trying to curry favor, he suggested.
Woodall argued that the nature of the stablecoin venture made it “uniquely suited to try to curry favor with the White House”.
One crypto banking expert, who asked to remain unnamed because of his ties to the OCC, said he is skeptical that anyone would ever deal with World Liberty’s bank except for trying to influence Trump.
“People can buy USD1 stable coins in large amounts and then tell the administration or tell Trump that they have done that,” he said. “And Trump gets to profit from that.”
The White House deferred comment to World Liberty Financial.
