How the Trump family is poised to profit from a $2 billion Middle East crypto deal that uses their stablecoin
President Donald Trump and his family's crypto entanglements continue to grow. The latest example came last week when Trump's son Eric announced that Emirati venture firm MGX would use Stablecoins released by World Liberty Financial – the family blockchain company – to pay for the past $ 2 billion investment in Binance of the crypto exchange.
The Trump family and their business partners stand to earn from the transaction, but how much? Due to the opacity of the deal, it is difficult to say exactly. Meanwhile, a speaker for Binance did not respond to a request for comment, and a representative for the World Liberty Financial refused to provide any more details beyond what the public announced.
Despite the lack of this transparency, Fate has been able to glean an upper estimate of how much the Trump family can earn from Tripartite dealing based on interviews with Stablecoin experts and a broader crypto landscape review.
Economics of Stablecoin
Stablecoins, one of the latest arms of Trump's growing crypto empire, has been a fixture of the crypto industry for many years. Companies like Tether and Circle -and more recently -only PayPal and Ripple -have made billions from these tokens, or a type of cryptocurrency that has been exposed to the underlying properties such as the US dollar.
Tether reported Income $ 5.6 billion last quarter, while circle reported $ 1.7 billion on its topline in 2024. It was a huge business, so it is not surprising that World Liberty Financial launched its own Stablecoin, USD1, in late March. Stablecoins tied to the US dollar is supported by short -term resources and other dollars -like equivalent. They usually earn yields around 4% – it is ninterest that most of the time is full -for -what gives the giver.
View this interactive chart on Fortune.com
If Binance handles the USD1, the World Liberty Financial will collect yield from the underlying reserves, which can net $ 80 million a year.
However, that estimate can change based on different variables. For one, if World Liberty collects full yield, Binance will not stand to benefit from handling the USD1 balance and can convert stablecoin to another owner, such as its own BNB cryptocurrency or other product that passes interest in the hold.
Also, reserves that support Stablecoin of the Trump family include treasures as well as various other “equivalent cash equivalent,” according to a spokesman. Unlike other gives, World Liberty Financial has not published its makeup of its reserves, so it can hold a significant portion of its properties in cash that do not bear fruit.
And Omid Malekan, a professor at Columbia Business School studying Crypto, has increased the possibility that MGX has not yet sent a balance to Binance, which may be the liquid of USD1 once they have received it and eliminated the ability of World Liberty Financial to collect any income. Malekan added that Binance can also use USD1 to help process employee exchange or payroll transactions.
“It is interesting -it is interesting to see how many of these tokens are burned in the short term -next given that suppliers will have to pay and pay employees,” added Edward Woodford, cofounder and CEO of the Stablecoin infrastructure provider Zero Hash. (“Burning” refers to the redemption of tokens with a stablecoin issuer for cash.)
Todd Phillips, a professor at Banking and Administrative Law at Georgia State University, said Binance could have won a deal with World Liberty Financial that would provide a crypto exchange to share income from Stablecoin reserves. Binance recently reached a similar organization in the circle. In addition to a $ 60 million one-time payment, the Stablecoin issuer agreed to pay a monthly Binance fee in exchange for stablecoin marketing circle to its users as well as maintaining a portion of its treasury in cryptocurrency.
Under such an arrangement, the World Liberty Financial will stand to earn less than the transaction, even if it boosts the profile of the recently launched Stablecoin -as well as its liquidity.
Binance had previously cooperated with the Paxos who gave Paxos their own stablecoin, busd, which was killed by regulators in early 2023. Notably, most of the USD1 was issued in Binance's own blockchain.
“Why USD1?” Said Malekan. “It is possible that they only offered the best economy [to Binance]. “
Upshot is the potential of the Trump family's $ 80 million income from Stablecoin may be lower if the coins are burned or if the proceeds are shared.
Rebel of Democrats
Regardless of the terms of dealing between Binance and World Liberty, democratic lawmakers emphasized the transaction as the latest example of Trump's interests of interests.
Rep. Maxine Waters (D-Calif.), The member of the House Financial Services member, presented a planned blockchain hearing on Tuesday, pointing that the Trump family maximized crypto while working to promote regulation for the industry. “I'm deeply concerned that Republicans don't just ignore Trump's corruption, they legitimate Trump and his family's efforts to enrich themselves,” he said in a statement shared in Fate.
The Stablecoin law, which advanced to the Chamber and Senate with Bipartisan support, was more dissatisfied. A group of democratic senators who previously approved a version of the bill announced Last weekend they were opposed to the latest draft, triggered by Trump's USD1 deal concerns.
“This is corruption and no senator should support it,” Sen said. Elizabeth Warren (D-Mass.) In a statementIn reference to the Senate Stablecoin Bill and the interests of Trump's stablecoin.
This story was originally featured on Fortune.com
