USD1 Stablecoin: How It Differs from USDT & USDC
In a move that has shocked the digital finance world, World Liberty Financial, a decentralized financial venture backed by President Donald Trump and his family, launched the USD1 stablecoin on March 25, 2025. USD1 promises stability, full backing by cash assets and U.S. government securities, and collaboration with renowned asset custody company BitGo. It will soon be traded on the Ethereum and Binance Smart Chain networks.
But is USD1 just another typical stablecoin in the market, or is this the beginning of a major revolution in digital finance?
What is USD1 Stablecoin?
USD1 is a stablecoin introduced by World Liberty Financial (WLFI) and was announced by President Donald Trump’s sons on Tuesday, March 25, 2025.
This stablecoin will maintain a value of $1 and will be fully backed by short-term U.S. government securities, U.S. dollar deposits, and other cash equivalents.
The stablecoin aims to provide access to DeFi with the credibility and protection of traditional finance, offering a digital dollar that can be integrated into strategies for secure cross-border transactions, said WLFI co-founder Zach Witkoff.
Why Did World Liberty Create the USD1 Stablecoin Despite Existing Stablecoins?
This development is driven by the market cap growth of dollar-backed stablecoins like USDT and USDC, which have reached all-time highs this year, growing by more than 46% over the past year, according to CryptoQuant. Additionally, U.S. Treasury Secretary Scott Bessent stated at the inaugural White House Crypto Summit this month that "we will maintain the U.S. as the dominant reserve currency of the world and will use stablecoins to do so." This signals a stronger push to leverage stablecoins in maintaining U.S. dollar hegemony.
At last week's Digital Assets Summit in New York City, Trump addressed the audience virtually, stating that the industry "will launch an economic growth explosion, and with the resurgence of the dollar, stablecoins will help expand U.S. dollar dominance." His aim is to boost the economy and reinforce the U.S. dollar’s global standing.
Furthermore, the rapid rise of World Liberty Financial (WLFI) since its launch in October 2024 has been significant. It successfully raised $550 million from the sale of its two previous tokens. The Trump-backed project, which positions itself as a crypto banking platform, revealed that it could secure 75% of the revenue from this venture. The token sale attracted over 85,000 verified participants and secured high-profile supporters, including Tron founder Justin Sun, who increased his stake to $75 million in January.
This rapid growth comes as the Trump administration accelerates its crypto agenda, making stablecoins a key part of its economic and financial strategy.
USD1 Reserve and Initial Launch
According to World Liberty, the USD1 reserves will be held by BitGo, a California-based digital asset custody firm. Additionally, BitGo Prime, the firm’s prime brokerage service, will assist USD1 by providing liquidity for token transactions and trading.
Moreover, USD1 will initially launch on the Ethereum and Binance Smart Chain networks, which are digital ledgers that support crypto asset movements. World Liberty also plans to expand USD1 to other blockchain networks in the future.
Differences Between USD1, USDT, and USDC
The use of stablecoins is not new in the crypto world. Before the introduction of USD1, the market was already dominated by stablecoins like USDT from Tether and USDC from the U.S.-based firm Circle. The launch of USD1 will face strong competition against these two leading stablecoins, which have long been established in the market.
Here are the key differences between USD1, USDT, and USDC:
| Stablecoin Type | USDT | USDC | USD1 |
|---|---|---|---|
| Publisher | Tether Limited | Circle & Coinbase (Centre Consortium) | World Liberty Financial (WLFI) |
| Reserve Asset | The asset mix includes short-term U.S. treasury bonds, cash, secured loans, precious metals, and other investments. | 100% cash and cash equivalents such as short-term US treasury bonds. | Fully backed short-term US treasury bonds, US dollar deposits, and other cash equivalents. |
| Blockchain | Ethereum, Tron, Solana, BSC, Avalanche, Polygon, Arbitrum, and others | Ethereum, Solana, Avalanche, Algorand, Tron, and other. | Ethereum (ETH) and Binance Smart Chain (BSC) blockchains, with plans to expand to other protocols in the future |
| Main Purpose | Widely used for crypto trading and DeFi | Used in digital payments and DeFi ecosystems with an emphasis on security and regulatory compliance. | Targeted at financial institutions & cross-border transactions |
| Control & Audit | It has been criticised for a lack of transparency; reserve reports are published regularly, and there are efforts to obtain a full audit by the 'Big Four' accounting firms. | Strictly regulated by Circle and Coinbase with monthly audits by leading accounting firms like Deloitte. | The reserves will be managed by BitGo, a well-known digital asset custodian company. Regular audits will be conducted by a third-party accounting firm (no information) |
| Popularity & Adoption | The largest and most widely used stablecoin in the crypto market. | A more reliable alternative to USDT and increasingly gaining ground in crypto transactions. | Just announced and not yet available for trading; market acceptance is still unknown |
| Regulation | Often faces criticism regarding regulatory compliance and reserve transparency. | More compliant with US and European regulations, with an emphasis on transparency and compliance. | Still in its early stages; potential for regulatory challenges, especially with the involvement of political figures like Donald Trump. |
While launching a stablecoin is relatively easy, building an ecosystem that adopts and integrates it is far more challenging. The question remains: Will World Liberty compete with other financial businesses, or will it seek strategic partnerships to expand USD1’s adoption?
When Will USD1 Be Traded?
For now, World Liberty Financial has only announced the launch of the USD1 stablecoin. However, USD1 is not yet available for trading in the market. World Liberty Financial has cautioned the public against scams and advised waiting for its official announcement regarding USD1’s market availability.
Source: X post from World Liberty Finance page
Why Is There a USD1 Coin on CoinMarketCap?
The USD1 listed on CoinMarketCap belongs to Kinesis, a digital finance platform. This stablecoin is pegged 1:1 to the U.S. dollar and is built on the Stellar and ERC-20 blockchain networks. Kinesis’ USD1 aims to provide fast and secure transactions within its ecosystem, which also includes digital assets like gold (KAU) and silver (KAG).
This is different from the USD1 stablecoin launched by World Liberty Financial (WLFI). USD1 is a name used by two separate entities in the crypto world—WLFI and Kinesis—both of which are independent and unrelated.
- USD1 by Kinesis: Part of the broader Kinesis platform.
- USD1 by WLFI: A separate initiative launched by World Liberty Financial.
Despite sharing the same name, these stablecoins are issued by different organizations and operate within distinct ecosystems.
Conclusion
The launch of USD1, backed by Donald Trump and World Liberty Financial, adds a new player to the stablecoin market. While it promises full backing by U.S. Treasuries and cash reserves, it is still in its early stages, and adoption levels remain uncertain.
When comparing with USDT (Tether) and USDC (USD Coin):
- USDT is widely used but has faced transparency issues.
- USDC is more transparent and regulatory-friendly, making it a safer option.
- USD1 aims to be a politically-backed institutional stablecoin, but its long-term success depends on adoption and regulatory reception.
For now, USDT and USDC remain dominant, but if USD1 gains trust and institutional adoption, it could become a major competitor in the stablecoin market. Will USD1 be the next big thing in crypto, or just a short-lived hype? Let’s wait and see!
