According to Decrypt, former President Donald Trump’s crypto venture World Liberty Financial launched its native token earlier this month and is now launching something even more ambitious: its own stablecoin that will serve as a substitute for the U.S. dollar. It is reported that they are planning.
Stablecoins are a type of cryptocurrency that is pegged 1:1 to the value of fiat currencies such as the dollar or euro, and have become extremely popular over the past three years. If a report on World Liberty released Monday by crypto publication Decrypt is accurate, the World Liberty team will join the likes of PayPal, Coinbase, and Robinhood, all of which have their own versions of stablecoins. or under development.
The World Liberty stablecoin is still in development and will take some time to launch as the team works to determine “how to make financial products secure before they go to market,” an anonymous source said. told Decrypt.
Those who closely monitor the platform may have seen this development coming. Earlier this month, the World Liberty team announced that Rich Teo, co-founder of Paxos, the stablecoin issuer that manages the USD-backed Paxos Standard Token (PAX), will join the platform as head of stablecoins and payments. He announced that he would participate.
However, building a stablecoin is not as easy as hiring one person. It will require significant capital and murky regulatory and legal lines to navigate, not to mention the ability to compete with giants like Tether and USDC.
In order to keep the value of a stablecoin at a constant price, it needs to be collateralized or backed by fiat currency. Some projects have attempted to circumvent this requirement using cryptocurrency gimmicks, but these have largely failed, as was the case in 2022 when stablecoin issuer Terra collapsed, wiping out billions of dollars. collapsed spectacularly.
While questions remain about how the World Liberty team plans to develop a reliable stablecoin, the Trump family could potentially reap significant benefits if the project gets off the ground. Tether, the world’s largest stablecoin, reported a record profit of $5.2 billion in the first half of 2024 alone.
World Liberty Financial, announced in early September, less than a month and a half after the election, is described as a “decentralized financial money market.” WLFI is a so-called governance token, a token that allows its holders to make decisions, vote on proposals, and manage on-chain crypto projects. Tokens are non-transferable and non-revenueable.
Prior to launch, the company whitelisted over 100,000 accredited investors and hoped to raise $300 million in its first sale. The company missed that goal, raising $14 million and offloading only 4.7% of its tokens.
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