As leaders From World Liberty Financial, a cryptographic company, owned by American president Donald Trump and his family, surpass themselves around the world to try to win new cases, criticisms have raised the alarm concerning the collection of alleged conflicts of interest in their wake.
On Thursday, Eric Trump appeared on stage in Dubai at the Crypto Conference token2049. Alongside him, seated Zachary Witkoff, co-founder of World Liberty Financial and son of the White House envoy in the Middle East, Steve Witkoff.
Together, the couple announced that USD1, a crypto piece unveiled by World Liberty Financial in March, would be used by MGX, an investment company funded by the United Arab Emirates, to make an investment of $ 2 billion in Binance, the largest exchange of global crypto.
As an intermediary of the agreement, World Liberty Financial should earn tens of millions of dollars. “We thank MGX and Binance for their self -confidence,” Witkoff told the crowd of Token2049, the New York Times reported. “It’s just the beginning.”
USD1 is what is known in industry circles as a stablecoin, a type of crypto part linked to a $ 1 assessment by a reserve of money and other assets. A Stablecoin has a regular assessment through understanding that if someone wants to exchange a part against the dollar he represents, the transmitter can draw from the reserve.
The model is simple: World Liberty Financial receives US dollars in exchange for parts that customers can negotiate freely on the cryptography market. It maintains some of these cash and cash equivalents, and invests the rest in American government obligations – also called treasury bills – which arouse interest.
The benefits of stabbing transmitters depend in part on the interest rate in force – now, the short -term treasure bills give just over 4%, but otherwise on a linear scale with the offer. The higher the amount of stablecoin in circulation, the more the underlying reserve of the assets from which the issuer can generate income.
Consequently, the agreement between MGX and Binance, which will increase the USD offer up to 2 billion units, should be extremely lucrative for World Liberty Financial – and by extension, Trump and his family. If the company was investing the entirety of $ 2 billion in short -term US treasury bills, it would earn around $ 85 million in current market rates each year.
However, the agreement ignited the concerns about the perspective that World Liberty Financial, in which the Trump family has a 60% participation through a distinct entity, could be involved in a thicket and thorny ethical problems. By making workforce in USD1, according to the argument, the entities affiliated with foreign powers could indirectly transfer wealth to the Trump family and buy a good favor from the practicing American president.
“The transaction begins to pedal,” says George Selgin, emeritus director of the Center for Monetary and Financial Alternatives at the Cato Institute, an American reflection group. This may “make the United States look like a banana republic”.
