Trump’s USD1 Stablecoin Hits $500M Funding: Ari10 CEO Raises Red Flag on USD1’s 1:1 Treasury Peg

Donald Trump’s recent venture into the cryptocurrency market with World Liberty Financial has sparked debate about his intentions. WLFI recently launched its USD1 stablecoin on BNB Chain Testnet, leading investors to contemplate the aim of this recent development. Mateusz Kara, CEO of European crypto payment giant Ari10, has issued a statement arguing that this move is less about blockchain technology and more about fortifying the dominance of the U.S. dollar in global markets. 

Ari10 CEO Argues Against the Market Influence of USD1

Mateusz Kara, the CEO of Ari10, a fiat crypto payments-based company, has raised concerns over key issues related to the new stablecoin. USD1, a stablecoin in the works by World Liberty Financial, a company closely linked to the Trump family, is pegged 1:1 to U.S. treasuries and cash equivalents. Operating on the Ethereum and the Binance Smart Chain, the stablecoin has already collected $500 million in funding and has attracted over 80,000 verified users. While this launch may look like a step towards crypto adoption, Kara argues it serves an ulterior financial motive.

“The real goal behind strengthening the stablecoin market is to turn the world into a more receptive marketplace for U.S. bonds,”, Kara stated. He further explained that platforms issuing stablecoins like USD1 must acquire USD and invest in treasury bonds. This creates a decentralized global system for distributing American debt, thus expanding the spread of the U.S. dollar. By increasing demand for U.S. dollars through stablecoins, Kara argues that the U.S. can borrow more affordably while expanding its financial influence. He has also warned that the European Bloc needs to act quickly to strengthen its euro-based stablecoins or risk losing the market. 

Kara has been a big name in merging traditional finance with crypto adoption, especially in Europe. As a staunch proponent of regulations like MiCA, he has played a crucial role in shaping Europe’s evolving crypto space. Kara has once again provided a critical perspective on stablecoins can be used not just as digital assets but also as instruments of financial influence. 

World Liberty Financial Expands Portfolio, Acquires Several Coins

WLFI, the DeFi venture backed by the Trump family, has rapidly expanded its cryptocurrency holdings with regular acquisitions. Recently, the firm acquired 3.54 million Mantle (MNT) tokens after the Mantle network was upgraded, spending $3 million on the acquisition. This purchase comes after a previous purchase of 2.45 million MNT for $2 million in early March.

WLFI’s total Mantle holdings now stand at close to 6 million tokens valued at around $5 million as of now. These acquisitions have been part of a broader plan to create a treasury of assets with high potential in the long term. In addition to Mantle, WLFI has also invested steadily in other cryptocurrencies such as Ethereum (ETH), Wrapped Bitcoin (WBTC), Avalanche (AVAX), TRON (TRX), Chainlink (LINK), Athena (ENA), among others. 

WLFI Navigates Losses, Looks for Way Forward

The company’s total investments across 11 tokens has been close $346 million. However, the firm currently faces a paper loss of $111 million, as its portfolio stands at $234.6 million. Despite its losses, WLFI continues to make strategic investments. Experts have analysed that these purchases may be a part of planned collaborations or reflect confidence in the market’s recovery in the long term. WLFI has spent $28 million since the February market decline to acquire six assets, including Ethereum. 

The Road Ahead: Will USD1 Reshape the Global Financial Landscape?

The new USD1 stablecoin initiative shows how stablecoins are evolving from mere crypto assets into instruments of the global financial landscape. Also, the involvement of the Trump family might be a strategic advantage that USD1 may try to exploit. Mateusz Kara’s arguments have highlighted the implications of such moves, especially their potential to reshape the debt markets and influence financial systems. As WLFI continues to expand its portfolio, the latest USD1 stablecoin may be the solution for their woes, but will it stick around is the main question.