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Donald Trump’s crypto venture, World Liberty Financial, is sending ripples across DeFi, revealing plans to launch a stablecoin, insiders told Decrypt. After raising $14 million in its recent token sale, the project is determined to tap into the potential of pegged assets, though launching the stablecoin may take a while as the team irons out critical safety features.

Stablecoins, pegged primarily to the U.S. dollar, play an essential role in crypto ecosystems as they offer a buffer against volatility. For World Liberty, the stablecoin move isn’t entirely unexpected. Earlier this month, Rich Teo, co-founder of Paxos, joined the project to lead stablecoin and payment operations, signaling a steady march toward stablecoin issuance.

$80k Price Target Amid Tight Regulatory Clouds

The stablecoin venture isn’t just a sideline affair; it’s poised to make noise. Already linked to Trump’s political brand, World Liberty’s potential stablecoin could thrust him into a central role if he returns to the White House. As president, Trump could shape regulations around crypto assets, which remain a gray area in U.S. law. The SEC recently turned heads by dismissing charges against Binance tied to stablecoins, but the agency’s stance remains firm on other fronts.

U.S. lawmakers, meanwhile, plan to vote on stablecoin legislation in 2025, possibly around the same time Trump’s White House bid reaches full throttle. If approved, Trump could steer federal crypto policies that directly impact his own venture, heightening both risks and rewards.

The stablecoin, once live, may deliver substantial profits. Stablecoin issuers, much like banks, profit from reinvesting reserves in yield-bearing assets. Tether, the top player in the market, bagged a record $5.2 billion in profits in early 2024 alone by reinvesting its funds in U.S. Treasury bills.

Crowded Field Demands Strategic Partnerships

Despite the hype, launching a new stablecoin in an already saturated market demands more than star power. To build traction, World Liberty would need partnerships with exchanges like Binance or Coinbase, which can bring liquidity and visibility. However, Trump’s connections could provide leverage; the SEC lawsuits targeting both exchanges could position a potential President Trump as a negotiating power.

But challenges extend beyond partnerships. Creating a truly collateralized stablecoin requires deep capital. World Liberty’s token sale, while notable, raised just $14 million, far short of the $300 million target. Yet the project is banking on Trump’s influence to tap retail investors looking to break into the complex realms of crypto and DeFi.

Trump’s team has touted the stablecoin as a bid to “make crypto and America great again,” casting it as a bulwark against the perceived perils of a central bank digital currency (CBDC). Trump has repeatedly condemned CBDCs as a threat to financial autonomy, vowing to outlaw them if reelected. “They could take your money,” Trump warned in a speech. “You wouldn’t even know it was gone.”