Trump family-supported World Liberty Financial (WLFI) proposed a new initiative at the governance forum on Wednesday, planning to allocate 5% of the WLFI token treasury (approximately $120 million) to expand the supply and market adoption of the USD1 stablecoin. The team emphasized that this move responds to the “increasingly fierce competition in the stablecoin landscape,” but community voting results are currently divided, with opposition votes temporarily leading.
(Background recap: Trump family’s World Liberty Financial airdrop! WLFI holders can each claim $47 USD1 stablecoins)
(Additional background: The era of USDT and USDC duopoly is beginning to fracture: the stablecoin landscape is being reshuffled)

Table of Contents

• Stablecoin Battle Continues
• Subsidy Strategy and Gap Narrowing
• Institutional Deployment and Ecosystem Flywheel
• Regulatory Shadows and Governance Risks

One year after Trump’s return to the White House, the crypto project associated with his family, World Liberty Financial (WLFI), is offering new chips. This Wednesday, a proposal appeared at the governance forum, planning to use 5% of the treasury reserves—about $120 million—to boost the market share of their stablecoin USD1. Once the news broke, both Washington and Wall Street focused on it: this is not just an expansion plan within the crypto space, but also a stress test for political influence and regulatory boundaries.

Stablecoin Battle Continues

WLFI’s plan is straightforward—use subsidies to exchange for liquidity. According to the governance proposal, the team will release 5% of WLFI tokens, specifically to reward listings and promotion of USD1 on centralized and decentralized exchanges. This approach is similar to the traditional tech industry’s “customer acquisition cost,” but the competitors are now giants like PayPal PYUSD and Tether USDT instead of mobile apps.

Currently, USD1’s market cap is about $3 billion, still $1.1 billion short of PYUSD’s $4.1 billion. Internal WLFI documents openly state that if rapid expansion does not occur, the market will be solidified by existing players, leaving little room for newcomers to overturn the status quo.

Subsidy Strategy and Gap Narrowing

External observers question whether short-term subsidies can drive long-term scale. WLFI responds that the funds will be locked into three major scenarios: first, providing market-making incentives for liquidity pools linked to USD1; second, subsidizing payment companies to integrate settlement interfaces; third, offering rebates to cross-border remittance providers. Ultimately, they are betting on the idea of “growing the pie first, then discussing profits.”

However, Disruption Banking’s on-chain data audit points out that some USD1 trading volume may be injected by market makers like DWF Labs through anonymous wallets, and real demand remains to be verified. Several community members expressed concern that “this makes them uneasy,” worried that subsidies might ultimately just hand over chips to high-frequency traders.

Institutional Deployment and Ecosystem Flywheel

WLFI does not want to be labeled as a “meme coin.” Canton Network has announced plans to deploy USD1 on regulated blockchains, standardizing asset collateralization and 24-hour settlement. On the other side, a partnership with ALT5 Sigma aims to open cross-border payment scenarios for USD1. In internal briefings, WLFI emphasizes:

“The larger the circulation of USD1, the higher the value of WLFI governance rights.”

If this flywheel model runs smoothly, the cycle of subsidies → circulation → increased governance value → more capital inflow can be established. Conversely, if circulation becomes bloated or regulation hits a brake, the flywheel could stall instantly.

Regulatory Shadows and Governance Risks

WLFI’s relationship with Trump’s family puts any capital movement under a magnifying glass. The 《2025 GENIUS Act》 requires White House officials to report crypto holdings and prohibits influencing token prices. To unlock the treasury, WLFI must prove that its subsidy plans do not constitute illicit benefits transfer.

Supporters in the forum believe that buybacks and subsidies can “protect early investors,” while opponents argue that large-scale unlocking could dilute the tokens in circulation. One investor bluntly commented: “If $120 million is burned and USD1 still can’t catch PYUSD, who will buy?” Although Trump was not directly mentioned, the implied political accountability is strong.

Meanwhile, the token buyback plan temporarily supports WLFI’s price but is also criticized for conflicting with subsidy actions: the former contracts circulation to stabilize prices, while the latter expands circulation to stimulate adoption. Whether these two paths can synchronize remains to be seen.

Overall, this $120 million move is a multi-layered test of capital efficiency, trust accumulation, and policy red lines. Subsidies can buy current liquidity but not sustainable credibility; political halo provides volume but also brings additional scrutiny. WLFI aims to prove itself as the next-generation financial infrastructure, not just a “presidential concept coin.” Every governance vote and on-chain transfer from now on will be a crossroads of expectation and doubt.

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