KEY POINTS
- The team is still working on ensuring that the stablecoin will be safe for consumers, a source said
- WLFI recently tapped stablecoin expert Rich Teo to lead its stablecoins and payments unit
- Tether is under fire after a WSJ revealed the $USDT issuer is under criminal investigation by the DOJ
- WLFI has issues of its own, including the massive protocol net revenue allocation for Trump
World Liberty Financial, the DeFi protocol backed by Republican presidential candidate Donald Trump, is planning to issue a native stablecoin, a new report revealed. The report came weeks after WLFI announced that it has tapped Rich Teo, the co-founder of stablecoin issuer Paxos, to lead its stablecoins and payments department.
WLFI's Stablecoin Project Planning Underway
The team behind WLFI, which includes Trump's sons Donald Trump Jr. and Eric Trump, is looking to issue a native stablecoin, but planning is still underway and it may take some time before the new offering comes out, Decrypt reported Monday, citing sources familiar with the matter.
One source revealed that the team is still working out the project's foundations, including how to make the stablecoin safe for consumers.
Another source said WLFI is also working with other major components of the controversial protocol while subsequently planning the stablecoin launch.
Decrypt's editor in chief Guillermo Jimenez further revealed that the stablecoin project is "a crucial part of WLFI and is being worked on in tandem with other features."
The project is slow playing the stablecoin launch, but sources tell @s_lutz95 the token is a crucial part of WLFI and is being worked on in tandem with other features. The effort will likely be led by Paxos co-founder Rich Teo, who recently joined the WLFI team.
— Guillermo Jimenez (@guillermojimnz) October 28, 2024
The State of the Stablecoin Industry
WLFI's plans to dabble into the stablecoin segment comes at a critical time, especially with reports coming out regarding the supposed attention Tether is getting from the U.S. government.
The Wall Street Journal recently reported that the U.S. Justice Department is conducting a criminal investigation into Tether, the company behind USDT, the world's largest stablecoin by market cap.
Tether chief Paolo Ardoino slammed the supposed "false" reporting, adding that there has been "no indication that Tether is under investigation."
However, this isn't the first time, Tether's name has been linked to supposed criminal activity. The company was accused of corruption and allegedly engaging in "shady" business practices, as per a billboard in Times Square, New York in June, ran by Consumers' Research.
WLFI's Own Issues Piling Up
Aside from the stablecoin market possibly being hit by allegations against Tether, WLFI has problems of its own that have been piling up as soon as the project was announced by Trump's sons.
Just this month, the team published the project's "gold paper" that was questioned due to the details that showed 75% of the protocol's net revenue will go to an entity reportedly owned by the former president.
The WLFI token's whitelist requirements also raised criticism among crypto users, who pointed out how the requirements were only limited to richer people.
Prominent Bitcoin community member Pledditor also revealed earlier this month that WLFI has updated its project documentation after initially promising during a Spaces session that 63% of the WLFI tokens will be sold to the public. Pledditor pointed out that the project's papers now reveal only 35% will be available for public purchase.
So @WorldLibertyFi updated their documentation
— Pledditor (@Pledditor) October 16, 2024
They've completely backpedaled on their promise in Spaces that "63% of tokens will be sold to the public"
That number is now only 35%
That means $WLFI will be a low float, high FDV tokenhttps://t.co/bUahlofimA pic.twitter.com/IPf8rFzVTq
It remains to be seen whether WLFI's upcoming stablecoin will have a better standing among crypto users and whether it will not be caught up in concerns around the stablecoin industry's stability.
