The Trump family is cashing in on crypto. It’s creating problems in Congress.
The latest Trump family crypto venture is becoming a hitch in GOP efforts to win Democratic support for digital assets legislation.
By Jasper Goodman
The Trump family’s latest cryptocurrency business venture could jeopardize bipartisan support for a GOP effort to lightly regulate the digital assets industry.
Republican lawmakers need Democratic votes to pass long-promised crypto legislation that they are rushing to send to President Donald Trump’s desk. But a company started by Trump’s eldest sons announced last week that it would launch a new digital coin, a move that could make it harder to get additional Democrats on board.
World Liberty Financial’s new stablecoin, a token pegged to the U.S. dollar, could allow Trump family members to profit off the GOP-led legislation that would help legitimize the assets and enact industry-friendly rules for how they are overseen by regulators.
Several Democrats in both chambers already support GOP-led stablecoin bills, but the Trump factor is poised to become a hitch. In the House, the ranking member of the Financial Services panel, Rep. Maxine Waters of California, is expected to oppose the legislation at a committee vote this week if it does not include language that would block Trump and Elon Musk from issuing stablecoins, according to a Democratic aide with knowledge of the matter, granted anonymity to discuss a decision not yet public.
Democrats involved in crypto talks on Capitol Hill say the stablecoin announcement from the Trump family crypto firm is a detriment to their legislative efforts.
“I can’t think of anything quite so damaging to bipartisanship than that happening,” said Rep. Jim Himes, a senior Connecticut Democrat on the House Financial Services Committee who has backed stablecoin legislation in the past and said he hopes to again this week.
The concerns illustrate the challenge of achieving bipartisanship in the Trump era, even on an issue that lawmakers on both sides have gotten behind as the industry’s Washington influence has grown. It also highlights how Trump and his family’s embrace of crypto have come with some downsides for Republican lawmakers who are working to legislate on the issue.
Even some of the industry’s most ardent supporters in Congress are acknowledging that World Liberty’s latest move could become an obstacle in talks with Democrats.
“It shouldn’t make life harder, but it might,” said Sen. Cynthia Lummis, a Wyoming Republican who has played a leading role in crafting the legislation aimed at boosting the crypto sector.
The legislation has garnered bipartisan support, teeing it up to become the first major crypto reform ever passed by Congress. At least three Democrats are already supporters in the House, but concerns from Waters, a long-time Trump foe and critic of the president’s crypto business ventures, could imperil broader support from her side of the aisle.
A spokesperson for House Financial Services Republicans, Brooke Nethercott, said in a statement that the panel “looks forward to continuing our work” on stablecoins.
“If we want clear standards in this market, the status quo is not the answer,” she said. “Several members on both sides of the aisle have been working to provide clear regulatory guidelines to allow payment stablecoins to flourish in the United States.”
It remains unlikely that the concerns over the Trumps’ new stablecoin will jeopardize Republicans’ ultimate ability to pass crypto legislation. Democrats have expressed concerns about Trump’s past moves on crypto, but have gone on to vote for industry-friendly legislation anyway. Supporters of the effort in the party say new, light-touch rules are needed for digital assets, even as the Trump family could benefit from the regulatory changes. The bipartisan support for crypto despite the Trump controversies is a sign of the industry’s growing political clout in Washington, where it has spent hundreds of millions of dollars in recent years to lobby and boost candidates who support its cause.
“You need the regulation regardless, but it’s certainly not helpful,” Sen. Kirsten Gillibrand said of the Trump company stablecoin launch. The New York Democrat helped write a stablecoin bill that is awaiting a Senate floor vote.
“It makes something that’s a very serious financial payment system into something that seems non-serious,” she said.
Trump-aligned Republicans are brushing off the concerns. “I don’t think it’s a problem,” said Rep. Byron Donalds (R-Fla.), an ally of the president who sits on House Financial Services.
Asked if he was concerned about the World Liberty stablecoin on Wednesday, Rep. Bryan Steil (R-Wis.), the lead sponsor of the House bill being marked up this week, told reporters that Republicans are “focused in on the legislation that’s been drafted.”
World Liberty’s stablecoin, called USD1, will be pegged to the value of the dollar and “backed by short-term US government treasuries, US dollar deposits, and other cash equivalents,” according to an announcement from the company posted on Medium. The firm also sells a separate crypto token called WLFI. (A representative for the company did not respond to a request for comment for this story.)
U.S. stablecoin issuers have long lobbied for legislation that would clarify how dollar-pegged tokens are regulated, and they could benefit from a bill that gives the industry a new stamp of legitimacy. The legislation under consideration would put in place new rules outlining which regulators oversee stablecoin issuers and the types of reserves the companies are required to hold.
Speaking at a major crypto conference in Washington on Wednesday, a World Liberty co-founder, Zach Witkoff, said the firm expects the market capitalization of stablecoins “to be many trillions of dollars in the next few years.”
“We view stablecoins as an integral part of not only crypto, but the entire financial ecosystem,” said Witkoff, whose father, Steve Witkoff, is Trump’s special envoy to the Middle East.
He appeared on stage at the conference — hosted by a crypto trade association called the Digital Chamber — alongside some of the project’s other co-founders, Zak Folkman, Chase Herro and Donald Trump Jr. Leading pro-crypto lawmakers including House Financial Services Chair French Hill and Senate Banking Chair Tim Scott also spoke on separate panels at the event.
Donald Trump Jr. said on the panel he was motivated to get into crypto after discovering how “discriminatory” the traditional financial system is toward conservatives.
“The sky is the limit for this,” he said.
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