Original title: How the Trump family is poised to profit from a $2 billion Middle East crypto deal that uses their stablecoin
Original article by: Leo Schwartz, Ben Weiss
Original translation: BitPush
President Trump and his family have an increasingly close relationship with cryptocurrencies. The latest example came last week when Trumps son Eric Trump announced that the UAE venture capital firm MGX would use a stablecoin issued by World Liberty Financial (the Trump familys 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 familys 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, USD 1, in late March this year. Like most stablecoins pegged to the US dollar, USD 1 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 USD 1, World Liberty Financial will receive interest on the reserve assets behind it, which at 4% could bring 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 USD 1 for a long time and may exchange it for BNB or other assets that can generate income.
In addition, according to the spokesperson, USD 1s 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 USD 1 after receiving it, World Liberty will not be able to earn any interest. In addition, Binance may also use these USD 1 for transaction settlement or employee salary payment on the platform. Edward Woodford, co-founder and CEO of Zero Hash (stablecoin infrastructure provider), also said: Suppliers and employees need to be paid, so these tokens may be destroyed soon. (Destruction means exchanging stablecoins for cash from the issuer.)
Maybe Binance gets a piece of the action?
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 and World Liberty also have such a cooperation arrangement, the latters 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 stopped by regulators in early 2023. Most of USD 1 is currently issued based on Binances own blockchain.
“Why USD 1?” Malekan said. “Maybe they just gave Binance the best conditions for cooperation.” In summary, although the Trump family may theoretically make $80 million in profit from USD 1, it depends on whether the tokens will be destroyed or whether the profits 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 seen the deal as new evidence of a conflict of interest between the Trump family and the crypto industry. California Rep. Maxine Waters, a senior Democrat on the House Financial Services Committee, walked out of a blockchain hearing on Tuesday to protest the Trump family’s involvement in regulatory legislation while profiting from it.
She said in a statement to Fortune: I am extremely concerned that Republicans are not only turning a blind eye to Trumps corruption, but are even helping him and his family legitimize their behavior of enriching themselves with cryptocurrency. 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 Trumps connection with USD 1.
Massachusetts Senator Elizabeth Warren said bluntly: This is blatant corruption, and no senator should stand for it.
