Trump-backed stablecoin raises conflict concerns in Congress

The Trump-affiliated World Liberty Financial (CRYPTO:WLFI) has launched its USD1 stablecoin, drawing controversy in Congress as lawmakers debate the STABLE Act, a bill aimed at regulating dollar-backed digital assets.

Representative Maxine Waters criticised President Donald Trump’s involvement in the crypto sector, alleging potential conflicts of interest and calling for amendments to block government officials from owning stablecoin businesses.

USD1, pegged to the U.S. dollar and backed by short-term Treasuries, positions itself as a secure digital asset.

However, Waters argued that Trump’s influence could compromise legislative integrity.

“Trump likely wants the entire government to use stablecoins for payments—from Social Security to taxes—and which coin do you think he’d choose? His own,” Waters stated during an April 2 hearing.

The STABLE Act, introduced by Representative Bryan Steil, seeks to establish clear rules for stablecoin issuance by U.S. banks and financial companies.

While bipartisan negotiations initially showed promise, WLFI’s announcement has created tensions among lawmakers.

Democrats have expressed concerns that Trump’s stablecoin could undermine efforts to ensure transparency and fairness in the crypto sector.

Committee Chair French Hill acknowledged the complexities arising from Trump’s involvement but emphasised the need for a federal framework.

“We’re focused on drafting legislation that provides regulatory certainty for stablecoins,” Hill said.

Stablecoins have become a cornerstone of the cryptocurrency market, facilitating over $6 trillion in annual transactions.

The Trump administration views stablecoins as essential for maintaining U.S. dollar dominance globally.

Treasury Secretary Scott Bessent previously stated that stablecoins would help cement America’s leadership in digital finance.

Despite these ambitions, Waters warned against enabling conflicts of interest, urging lawmakers to prioritise public trust over private gain.

The debate reflects broader challenges in balancing innovation with accountability as stablecoins gain prominence in financial systems.

Congress will continue deliberations on the STABLE Act and related bills, with amendments likely to address concerns over ethical governance and regulatory oversight.

The future of U.S. crypto policy hinges on resolving these tensions while fostering transparency and stability in the digital asset space.