Key Takeaways
- Trump-affiliated WLFI applied for an OCC trust bank charter to issue/custody USD1 under federal rules.
- USD1 has become one of the fastest-growing stablecoins through partnerships.
- WLFI has been involved in a number of controversies and scandals since its launch.
President Donald Trump-backed World Liberty Financial (WLFI), a decentralized finance (DeFi) protocol, has filed for a United States national trust bank charter.
This marks a significant step by WLFI toward integrating with traditional finance and stress testing for the cryptocurrency and U.S. banking sectors, given the project’s affinity with the President.
Is WLFI Becoming a U.S. Bank?
Yes, WLFI is actively pursuing a banking charter, but it’s not aiming for a full-service commercial bank.
On Jan. 7, WLFI announced that its subsidiary, WLTC Holdings LLC, submitted a de novo application to the Office of the Comptroller of the Currency (OCC) for a national trust bank charter.
The proposed entity, World Liberty Trust Company (WLTC), would focus on stablecoin operations, including:
- Issuing and redeeming USD1.
- Offering conversions from other major stablecoins (e.g., USDT, USDC) to USD1.
- Providing custody services for fiat currencies and stablecoins.
- Managing reserves backing USD1.
The proposed banking charter, if approved, would enable WLFI to operate under federal oversight, thereby enhancing its legitimacy and facilitating direct integration with the U.S. financial infrastructure.
This approval could position WLFI as a “digital-first bank” for crypto services, initially targeting institutional clients and later expanding to retail.
The Political Stress Test
WLFI is not the only crypto company eyeing a banking charter in the U.S. after the regulatory nod for crypto companies to enter the banking industry.
Other crypto firms like Ripple and Kraken have pursued similar charters. However, WLFI’s political connections could expedite or complicate the process.
If approved, it could pressure legacy banks and accelerate the adoption of crypto in critical sectors.
WLFI’s bank bid exemplifies the clash between crypto innovation and political oversight, amplified by Trump’s dual role as president and beneficiary.
Proponents view it as a win for U.S. crypto leadership, aligning with Trump’s pro-crypto stance. Critics, primarily Democrats, view it as self-dealing, where policy favors personal gain.
In May 2025, Rep. Stephen Lynch introduced the “Stop TRUMP in Crypto Act,” barring presidents, VPs, Congress members, and families from owning/controlling digital assets or trading with non-public info.
Similar bills, such as the “End Crypto Corruption Act” and amendments to stablecoin legislation aimed at prohibiting officials from profiting, were blocked by Republicans.
WLFI’s banking charter ambition has intensified political tensions, with Democrats pushing legislation to curb Trump’s crypto ventures amid allegations of conflicts of interest and national security risks.
The political showdown tests the future of crypto’s regulation. Trump’s deregulation contrasts with Democratic calls for transparency.
This could set precedents for how political figures engage with crypto, potentially influencing global adoption or triggering stricter U.S. rules.
WLFI Rapid Growth and Controversies
WLFI and USD1 are gaining prominence rapidly, driven by aggressive partnerships, exchange listings, and regulatory pursuits, though scandals have cast shadows on their trajectory.
The DeFi project run by Trump’s family members was launched in 2024. It raised $550 million in token sales by mid-2025.
The project also saw $2 billion in investment from Abu Dhabi. Its stablecoin launch turned out to be a success with billions in volume and market cap just weeks after launch.
However, the rapid rise came with its own share of controversies. Primary concerns include conflicts of interest, with reports indicating that the Trump family has profited hundreds of millions from token sales and holdings.
Allegations have surfaced of token sales linked to sanctioned entities. This includes connections to North Korean hackers and Russian-linked firms, raising national security fears.
However, WLFI and the administration have denied wrongdoing.
Other issues involve blacklisting large investors amid allegations of manipulation and broader concerns about foreign investments in the project.
