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World Liberty Financial, former president Donald Trump’s crypto venture, launched its native token earlier this month, and now is reportedly planning something more ambitious: its own stablecoin, which can serve as a stand-in for the U.S. dollar, according to Decrypt.
Stablecoins, a type of cryptocurrency pegged 1 to 1 to the value of a fiat currency like the dollar or euro, have become wildly popular over the last three years. If the report about World Liberty, published on Monday by crypto publication Decrypt, is accurate, the World Liberty team would be joining the likes of PayPal, Coinbase, and Robinhood, all of which have or are developing their own version of stablecoins.
The World Liberty stablecoin is still in development and will take time to launch as the team works to determine “how to make the financial product safe before bringing it to market,” an anonymous source told Decrypt.
Those keeping close tabs on the platform might have seen this development coming. Earlier this month, the World Liberty team announced that Rich Teo, cofounder of Paxos—a stablecoin issuer that manages the U.S. dollar-backed Paxos Standard Token, or PAX—would be joining the platform to serve as its stablecoin and payments lead.
However, building a stablecoin is not as easy as hiring one person. It requires a large amount of capital and the navigation of ambiguous regulatory and legal boundaries, not to mention the stamina to compete with giants like Tether and USDC.
To secure a stablecoin’s value to one steady price, it must be collateralized, or backed by a fiat currency. Some projects have attempted to circumvent this requirement with crypto gimmicks, but these have mostly collapsed spectacularly, as was the case in 2022 when stablecoin issuer Terra failed, wiping out billions.
Despite lingering questions about how the World Liberty team plans to develop a reliable stablecoin, the Trump family could make a significant profit if the project does get off the ground. Tether, the world’s largest stablecoin, reported a record $5.2 billion profit in just the first half of 2024.
World Liberty Financial, which was announced in early September, a month and a half prior to the election, has been described as a “decentralized finance money market.” WLFI is a so-called governance token, a token that allows holders to make decisions, vote on proposals and govern a crypto project on-chain. The token is nontransferable and does not earn yield.
Ahead of its launch, the company white-listed over 100,000 accredited investors and hoped to raise $300 million from the initial sale. It has fallen short of that target, with $14 million raised and only 4.7% of tokens offloaded.
This story was originally featured on Fortune.com