$80 million a year? How the Trump family uses their own stablecoin to get a piece of the pie in the Middle East's crypto-currency boom

By LEO SCHWARTZ / BEN WEISS

Compiled and edited by: BitpushNews

President Trump and his family have an increasingly close relationship with cryptocurrencies. The latest example came last week when Trump's son Eric Trump announced that the UAE venture capital firm MGX would use a stablecoin issued by World Liberty Financial (the Trump family's blockchain company) to pay for its $2 billion investment in the cryptocurrency exchange Binance.

The Trump family and their business partners are expected to profit from the deal, but the exact amount is difficult to determine because the details are opaque. Binance did not respond to a request for comment, and a spokesman for World Liberty Financial declined to provide more details beyond public information.

Despite the limited disclosure of information, Fortune still gave an upper limit estimate of the Trump family's possible profits by interviewing experts in the stablecoin field and combining it with an analysis of the current crypto ecosystem.

The business of stablecoins: big and invisible

Stablecoins are the latest addition to Trump’s expanding crypto empire, but they have long been an important part of the crypto industry. Tether, Circle, and later PayPal and Ripple have all made a fortune issuing stablecoins. Tether’s revenue in the most recent quarter reached $5.6 billion, and Circle’s total revenue in 2024 reached $1.7 billion.

For this reason, World Liberty Financial issued its own dollar stablecoin, USD1, in late March this year. Like most stablecoins pegged to the US dollar, USD1 is backed by short-term Treasury bonds and other dollar-like assets, and typically generates an annualized return of about 4% - and most of this interest usually belongs to the issuing institution.

If Binance holds USD1, World Liberty Financial will receive interest on the reserve assets behind it, which at 4% could bring in up to $80 million in revenue in a year.

However, this number is highly variable. For example, if World Liberty alone enjoys all the interest income, Binance will have no motivation to hold USD1 for a long time and may exchange it for BNB or other assets that can generate income.

In addition, according to the spokesperson, USD1's reserve assets include various "cash equivalents" in addition to government bonds. However, World Liberty has not disclosed the specific composition of its assets, so there may be cash components that do not generate income.

Omid Malekan, a cryptography scholar at Columbia Business School, pointed out that MGX may not have actually sent the funds to Binance. If Binance directly liquidates the USD1 after receiving it, World Liberty will not be able to earn any interest. In addition, Binance may also use the USD1 for transaction settlement on the platform or employee salary payment.

Edward Woodford, co-founder and CEO of Zero Hash (a stablecoin infrastructure provider), also said: "Suppliers and employees need to be paid, so these tokens may be destroyed quickly." ("Destruction" means exchanging stablecoins for cash from the issuer.)

Maybe Binance will get a piece of the pie?

Todd Phillips, a law professor at Georgia State University, pointed out that Binance may have signed some kind of profit-sharing agreement with World Liberty Financial. He cited the example that Binance had previously reached a similar agreement with Circle, which, in addition to paying a one-time payment of $60 million, also paid Binance monthly fees for promoting USDC and promised to keep part of the funds in the stablecoin.

If Binance also has such a cooperation arrangement with World Liberty, the latter's earnings may shrink significantly, but the liquidity and market visibility of its stablecoin will be significantly improved.

Binance once cooperated with stablecoin issuer Paxos to launch BUSD, but the currency was suspended by regulators in early 2023. Currently, most of USD1 is issued based on Binance's own blockchain.

“Why USD1?” Malekan said. “Maybe they just gave Binance the best conditions for cooperation.”

To sum up, while theoretically the Trump family could have made $80 million in profit from USD1, this would depend on whether the tokens would be destroyed or whether the profits would need to be shared.

Democrats hit back: 'A blatant conflict of interest'

Regardless of the specific agreement between Binance and World Liberty, Democratic lawmakers have viewed the deal as new evidence of a conflict of interest between the Trump family and the crypto industry.

California Rep. Maxine Waters, the senior Democrat on the House Financial Services Committee, stormed out of a blockchain hearing on Tuesday to protest the Trump family's involvement in regulatory legislation while profiting from it.

“I am extremely concerned that Republicans are not only turning a blind eye to Trump’s corruption, but are helping him and his family legitimize their cryptocurrency enrichment,” she said in a statement to Fortune.

The turmoil also affected the Stablecoin Regulation Act, which originally received bipartisan support in Congress. A group of Democratic senators who had previously supported the bill collectively opposed the latest version last weekend because of concerns about Trump’s connection with USD1.

Massachusetts Senator Elizabeth Warren said bluntly: "This is blatant corruption, and no senator should stand for it."