$80 million a year? How the Trump family relied on its "own stablecoin" to get a share of the huge crypto transactions in the Middle East
Original title: How the Trump family is poised to profit from a $2 billion Middle East crypto deal that uses their stablecoin
Original Authors: LEO SCHWARTZ, BEN WEISS
Original compilation: BitPush
President Trump and his family are increasingly tied to cryptocurrency. The latest example came last week, when Trump's son, Eric Trump, announced that UAE venture capital firm MGX would use stablecoins issued by World Liberty Financial, the blockchain company owned by the Trump family, to pay for its $2 billion investment in cryptocurrency trading platform Binance.
The Trump family and its business partners are expected to profit from the deal, but the exact amount is difficult to determine because the details are not transparent. Binance did not respond to a request for comment, and a spokesperson for World Liberty Financial declined to provide more details beyond public information.
Despite the limited disclosure, Fortune still provides an upper limit estimate of the possible profits of the Trump family through interviews with experts in the field of stablecoins and analysis of the current crypto ecosystem.
The business of stablecoins: big and invisible
Stablecoins are the latest in Trump's expanding crypto empire, but they have long been an important part of the crypto industry. Tether, Circle, and later PayPal and Ripple all made a lot of money by issuing stablecoins. Tether's revenue in the most recent quarter reached $5.6 billion, and Circle's total revenue in 2024 also reached $1.7 billion.
Because of this, World Liberty Financial issued its own USD stablecoin, USD1, in late March this year. Like most dollar-pegged stablecoins, USD1 is backed by short-term Treasuries and other dollar-like assets and typically generates an annualized yield of about 4% – and most of this interest is usually owned by the issuer.
If Binance holds USD1, World Liberty Financial will charge interest on the reserve assets behind it, which at 4% could bring in as much as $80 million in a year. However, there is a great deal of variability in this figure. For example, if World Liberty has exclusive access to all interest earnings, Binance has no incentive to hold USD1 for the long term, and may exchange it for BNB or other yieldable assets.
In addition, according to the spokesperson, USD1's reserve assets include various "cash equivalents" in addition to Treasury bonds. However, World Liberty does not disclose a specific asset composition, so there may be a non-earning-generating cash component in it.
Omid Malekan, a crypto scholar at Columbia Business School, pointed out that MGX may not have actually sent funds to Binance, and World Liberty would not be able to earn any interest if Binance liquidated USD1 directly after receiving it. In addition, Binance may also use these USD1 for trade clearing or employee payroll payments on the platform. Edward Woodford, co-founder and CEO of Zero Hash (a stablecoin infrastructure provider), also said: "Vendors and employees need to pay, so these tokens may be burned quickly." ("Burn" refers to the exchange of stablecoins for cash from the issuer.) ）
Binance might get a piece of the pie?
Todd Phillips, a law professor at Georgia State University, noted that Binance may have some sort of profit-sharing agreement with World Liberty Financial. As an example, he said, Binance previously had a similar agreement with Circle, which paid Binance a monthly fee to promote USDC, in addition to a one-time payment of $60 million, and promised to keep some of the funds in the stablecoin.
If Binance and World Liberty also have such a partnership arrangement, the latter's earnings may shrink significantly, but the liquidity and market visibility of its stablecoin will increase significantly. Binance partnered with stablecoin issuer Paxos to launch BUSD, but the coin was shut down by regulators in early 2023. USD1 is currently mostly issued on Binance's own blockchain.
"Why USD1?" "Maybe they just gave Binance the best terms to work with," Malekan said. To sum up, while the Trump family could theoretically make a profit of $80 million from USD1, it also depends on whether the tokens will be burned, or whether the profits need to be shared.
Democrats fight back: "naked conflict of interest"
Regardless of the specific agreement between Binance and World Liberty, Democratic lawmakers have seen the deal as new evidence of the conflict of interest between the Trump family and the crypto industry. Congressman Maxine Waters, a veteran Democrat on the House Financial Services Committee and a Californian, walked out of a blockchain hearing on Tuesday to protest the Trump family's profit-seeking involvement in regulatory legislation.
In a statement to Fortune, she said: "I am extremely concerned that Republicans are not only turning a blind eye to Trump's corruption, but are even helping him and his family legalize their use of cryptocurrency to enrich themselves." The turmoil also affected the Stablecoin Regulation Act, which originally received bipartisan support in Congress. A group of Democratic senators who had previously supported the bill collectively opposed the latest version over the weekend precisely over concerns about Trump's association with USD1.
Senator Elizabeth Warren of Massachusetts was even blunt: "This is naked corruption, and no senator should support it."
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