Donald Trump’s World Liberty Financial (WLF) crypto project, fresh off raising $14 million, now wants to launch its own stablecoin.

Sources say the WLF team is still developing the stablecoin and working on safety protocols to protect it, but it could take some time to come to life.

Trump’s stablecoin gamble

Stablecoins act as safe parking spots for crypto funds, allowing traders to escape volatility. They also bridge the gap between crypto and traditional financial markets, especially where U.S. dollars are hard to come by.

Issuers back their stablecoins with substantial reserves that they have to publicly prove routinely. Circle, for instance, claims to hold $34.59 billion in dollar assets, covering its $34.37 billion in USDC circulation. 

Other stablecoin issuers have skipped dollar collateral, instead using crypto for backing. Terra’s UST, which relied on an algorithm linked to another crypto token, failed spectacularly in 2022, wiping out $60 billion. The architect of that fiasco is currently behind bars.

Stablecoins face tight scrutiny from the SEC, which continues targeting major players in the industry, accusing them of unregistered securities offerings through stablecoins.

If Trump were to regain the presidency, he’d hold unique power over the legality of the stablecoin his business is trying to introduce.

On the financial side, stablecoins could be lucrative for WLF. Much like banks, stablecoin issuers profit by investing user deposits in high-yield assets like Treasury bills.

So far this year, Tether, the top stablecoin provider, has earned $5.2 billion in profit from such investments, holding nearly $81 billion in Treasury bills.

But the market is competitive. Breaking through requires partnerships with major exchanges like Coinbase and Binance to ensure wide availability.

Trump’s financial vision and economic strategy

Along with his newfound love for crypto, Trump’s also strongly against a U.S. central bank digital currency (CBDC). He pledges to outlaw the creation of any U.S. government-issued stablecoin if elected.

Trump’s commitment to fighting CBDCs aligns with his broader financial agenda, which includes his 2017 Tax Cuts and Jobs Act. The tax reform, a hallmark of his presidency, is set to expire in 2025, causing debate over its future.

Trump wants to keep the income tax and estate tax cuts introduced by the act. He’s also pushing to eliminate the cap on state and local tax deductions, a $10,000 limit set to end in 2025. 

The former president has also proposed cutting corporate tax rates to 15% for certain businesses, further lowering the top corporate tax rate that his 2017 law brought down from 35% to 21%.

Under Trump’s tax strategy, companies could instantly deduct investments in equipment and research, boosting business growth.

Meanwhile, WLF’s $300 million token sale has seen limited success, selling only $14.24 million worth of tokens, per Dune data. It’s a modest 4.7% of the public sale target, despite the project’s hype.

The WLF website even crashed during the initial sale, underlining the frenzy and interest surrounding Trump’s decentralized finance ambitions. According to co-founder Zach Folkman over 100,000 people had signed up to purchase WLFI tokens.