Trump studies his stablecoin: dollar competitor arrives

DDonald Trump has made support for cryptocurrencies a capstone of his election campaign, fuelling great expectations in the world of digital assets for the promises he has made in recent months to become reality. The president-elect has in fact pledged to make the United States 'the capital of cryptocurrencies', and in this sense he has already anticipated that he will not sell the more than 200,000 bitcoins in the hands of the federal government, the result of seizures and investigations in recent years, and that he will, on the contrary, create a strategic reserve of one million bitcoins, equal to around 90 billion dollars at current values. 

What for Trump himself was smoke and mirrors, an enemy of the dollar resulting from colossal fraud, last July suddenly became a source of development and innovation for the United States. So much so that the future tenant of the House Bank is now working on the creation of a stablecoin, a cryptocurrency pegged to the dollar, which would in fact become a direct competitor to the official dollar, a sort of digital dollar but created by a private entity. Thus Trump would become the first president of a state in the modern era to create a parallel currency, a rival to the legal tender.

These are rumours and indiscretions, but when it comes to Trump, nothing is surprising and the first weeks after his election prove it. But let us go in order. Parallel to the speech with which he gave his full support for cryptocurrencies, a symbol of freedom and sovereignty also from a monetary point of view, from the stage of the American Bitcoin Conference at the end of July, the Trump family launched its own business initiative in the crypto sector. Thus was launched the World Liberty Financial, an exchange platform 'inspired by Donald Trump', which, in the claim of the bare website, aims to 'shape a new era of finance', inviting everyone to be 'defiant', to rebel. The founders are Zachary Folkman and Chase Herro, well-known entrepreneurs in the industry, but in favour of the financial revolution embodied by the company is Donald Jr, while his brother Eric has been appointed Web3 Ambassador of the platform. In the meantime, the cryptocurrency exchange has already started the process of expanding its activities to decentralised finance: the adoption of the Aave protocol for DeFi thanks to the agreement with Chainlink on the Ethereum blockchain opens the door to the development of lending and borrowing solutions in a decentralised manner. "The partnership with Chainlink represents a significant step forward: we have never been so optimistic about the future of crypto and decentralised finance," Eric commented on the occasion.

Now Wolrd Liberty Financial's project, which raised $14 million in October through a sale of tokens, is allegedly also evolving with the hypothesis of issuing a proprietary stablecoin, a cryptocurrency tied to the dollar to shield it from cryptocurrency fluctuations. This is claimed by Decrypt, a site specialising in digital assets, citing 'sources close to the project'. It is only a hypothesis, it will take time to secure this product, according to the same sources. But it looks like a credible hypothesis. Stablecoins are emerging as a bridging tool between the world of traditional finance and digital assets. Cryptocurrencies of this kind have existed for years - Tether and Usdc being the most famous - but now the projects are multiplying, in the service of decentralised finance or efficiency. Thus, several platforms are considering issuing these instruments, while traditional finance institutions such as Jp Morgan and PayPal have already created their own stablecoins to simplify internal operations and transactions and to open up their business to the world of digital assets.

Already the fact that the president has direct interests in a crypto-related platform has sparked controversy. But now Trump is preparing for a quantum leap. Indeed, it is clear that if a company linked to the US president were to create and manage a private digital dollar equivalent, the value of the operation would be quite different. Among the hypotheses circulating that of financing US debt and issuing securities through cryptocurrencies would open up entirely new problems, not only of conflict of interest.