What is USD1?
USD1 is the stablecoin issued by World Liberty Financial (WLFI), a DeFi protocol backed by the Trump family, launched in early 2025. It is backed 1:1 by short-term US Treasury bills, dollar deposits, and equivalents held by BitGo. USD1 gained attention when Abu Dhabi sovereign wealth fund MGX used it for a $2 billion investment into Binance, making it the first stablecoin used in a major sovereign fund deal.
Full guide: What is USD1?How USD1 Works
USD1 is fully backed by short-term US government securities and USD cash deposits, with BitGo Trust Company acting as custodian. Users mint USD1 through authorized distribution partners, with reserves held in segregated accounts. The backing is attested regularly through third-party verification. BitGo's custody model ensures that reserves are legally ring-fenced from WLFI's operational funds. USD1 was designed to be compliant with anticipated US stablecoin legislation, anticipating regulatory clarity in 2025.
Deep dive: How USD1 worksKey Features
- +First stablecoin backed by a sitting US president's financial project — strong political visibility
- +BitGo Trust custody provides institutional-grade segregated reserve management
- +Used in the $2B MGX/Binance sovereign fund transaction — demonstrated institutional scale use case
- +Designed for US stablecoin regulatory compliance ahead of federal legislation
- +US Treasury-only backing eliminates credit risk from commercial paper or corporate bonds
- +Dual-chain (Ethereum + BNB Chain) launch targets both DeFi and CeFi user bases
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Key Risks
- !Political concentration risk: WLFI's fate is tied to Trump family political fortunes
- !Regulatory conflict of interest: a sitting president's stablecoin while Congress debates stablecoin law
- !Limited track record — launched 2025 with no history through a market downturn