Trump is making his first term grifting seem quaint
"Whether it’s the memecoin or stablecoin, there are a bunch of levers people can pull to directly enrich the president."
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During his first term as president, Donald Trump owned and profited from Trump-branded hotels, including one located just blocks from the White House, where private companies and foreign governments lined his pockets.
It was an unprecedented level of presidential corruption. And it seems quaint in comparison to what’s happening right now.
We’ve previously covered Trump’s shitcoin and the world historical grift that is his “crypto reserve” idea. Now, the Trump family has devised another method by which interested parties can directly line his pockets — a USD1 stablecoin offered by the Trump family’s World Liberty Financial crypto company.
USD1 is already making the Trumps even more wealthy, as the New York Times explained last week.
Sitting in front of a packed auditorium in Dubai, a founder of the Trump family cryptocurrency business made a brief but monumental announcement on Thursday. A fund backed by Abu Dhabi, he said, would be making a $2 billion business deal using the Trump firm’s digital coins.
That transaction would be a major contribution by a foreign government to President Trump’s private venture — one that stands to generate hundreds of millions of dollars for the Trump family. And it is a public and vivid illustration of the ethical conflicts swirling around Mr. Trump’s crypto firm, which has blurred the boundary between business and government.
To get expert insight about the world of stablecoins and how Trump is cashing in, I connected with Zack Guzmán, a crypto journalist and founder of Coinage. (Guzmán publishes a free weekly newsletter about the intersection of crypto and the broader world that you can check out here.)
“If Tether is making $13 billion and controlling more than half of the stablecoin market as of today, then Trump doesn't even need to necessarily take a huge percentage of that market to start making a lot of money as well,” Guzmán told me. “And so by launching his stablecoin, USD1, he has rightfully triggered a lot of ethical concerns in terms of a president being tied to a digital dollar, which constitutionally is problematic.”
Guzmán told me that while some crypto founders and investors remain optimistic about the Trump presidency, there’s already some buyer’s remorse.
“When he talked on the campaign trail about making the US the crypto capital of the world, was it just about Trump trying to make money for himself and his family? It’s definitely fair to say the latter has been his priority so far.”
A full transcript of my conversation with Guzmán, lightly edited for length and clarity, follows.
Aaron Rupar
For laypeople, what’s a “stablecoin” and how does Trump plan to cash in on them?
Zack Guzmán
They’ve been around for a while in terms of issuing dollars on the blockchain. A lot of people might own Bitcoin or Ethereum or Solana, but don't want to be exposed to the volatility those assets have. So sometimes people want to convert their positions back into dollars, and that's where the need for a digital dollar or stablecoin comes from. Tether was one of the first, and it's triggered a bunch of other competitors who have launched since, mostly because Tether makes a ton of money.
In addition to crypto traders, stablecoins became increasingly necessary for people around the world who are trying to access dollars. There are a lot of countries where capital controls might prevent people from being able to actually get dollars from their banks. The most commonly cited example is probably Argentina. I studied abroad there, and one of my host moms basically threw me out of her apartment because she wanted to be paid in dollars, and the exchange program wouldn’t do it. I became a bargaining chip. The peso lost so much value because of hyperinflation in Argentina that it makes sense why someone like her would want to have their savings in dollars.
Tether made $13 billion last year. They're making money hand over fist by just printing digital dollars on blockchain. Trump knows that very well because increasingly he's been courted by people in the stablecoin industry. Commerce Secretary Howard Lutnick has been helping Tether custody treasuries that back their stablecoin, so Trump is fully aware of the opportunities to make money in this space.
If Tether is making $13 billion and controlling more than half of the stablecoin market as of today, then Trump doesn't even need to necessarily take a huge percentage of it to start making a lot of money as well. And so by launching his stablecoin, USD1, he has rightfully triggered a lot of ethical concerns in terms of a president being tied to a digital dollar, which constitutionally is problematic.
Aaron Rupar
Do we understand the exact nature of Trump’s involvement in World Liberty Financial?
Zack Guzmán
Eric and Don Jr. have been championing the project, and they’re the ones technically controlling it via the Trump trust. But Donald Trump's face is on the site, and after all, it’s a Trump-branded DeFi project and platform. They are very much using Trump as a main marketing piece to attract what has been a lot of money. It’s fair to say it’s a Trump project being steered by his family for now, but money will be coming his way when he’s out of office.
Aaron Rupar
There’s obviously the brazen corruption aspect to this, and we’ll get to that later, but is Trump pushing any policies that could enrich himself through a stablecoin in less overt ways?
Zack Guzmán
The biggest one we’ve been highlighting is this stablecoin bill that’s on the verge of approval in the House and Senate. It’s something that stalled for years under the Biden administration even though Republicans and Democrats on the House Financial Services Committee both wanted to get it done. But now it’s very clear that it’s a top priority for Trump, and I think why became a little more clear after news of USD1 broke. [Update: Since my interview with Guzmán, Democrats have started souring on crypto legislation, endangering its chances of passing anytime soon.]
There’s lots of conflicts of interest. If one of these stablecoins collapses, would the government come in and bail them out similar to what we saw in 2008? Democrats have really been hammering that point home. Why all of the sudden is this a huge priority for Republicans and Trump to get done?
In terms of your question about how policy could benefit Trump, just giving these stablecoins a legal stamp of approval is a big one. Another aspect of deregulation outside of Congress has been the SEC and other banking regulators removing rules that prevented banks from using stablecoins, and that’s been happening over the last few months too.
When you put those pieces together, the road is now essentially clear for USD1 to massively increase the amount of digital dollars that exist. And the more of them exist, the more Trump’s World Liberty Financial project stands to make. That’s essentially the game. The more people use stablecoins, the more money you make.
Aaron Rupar
You brought up Tether, which is based down in El Salvador — arguably America’s closest ally these days. In addition to being home to a notorious gulag, El Salvador has been on the cutting edge of wanting to use Bitcoin as an official state currency. Is there any connection between Trump’s fondness for President Bukele and their shared crypto interest?
Zack Guzmán