A national bank regulator, appointed during Donald Trump’s presidency, has given part of the Trump family’s cryptocurrency venture provisional approval to form a bank charter. This strategic move could unlock access to larger clientele and potentially increase profitability.
This development marks a historic milestone in the U.S., as it is the first instance where a company linked to the family of a sitting president has attained bank status. This decision has raised eyebrows among Democratic lawmakers who worry about possible conflicts of interest.
On Friday, the Office of the Comptroller of the Currency revealed in a letter that World Liberty Trust Co.—38% owned by a Trump-connected entity and some family members—has been authorized to issue stablecoin cryptocurrency pegged to the U.S. dollar.
Previously, World Liberty Financial, the entity backing the conditionally approved trust, depended on the third-party crypto firm BitGo for a stable digital currency. The new approval enables the Trump family’s business to bypass intermediaries and provide the service directly.
While digital currencies, such as Bitcoin, usually exhibit extreme price fluctuations, they tend to be less attractive for organizations engaged in large-scale transactions.
Crypto tied to more stable values, like the U.S. dollar or the price of gold, can be more attractive to big spenders and can be “marketed for use as a means of making payments, transmitting money, or storing value,” according to the U.S. Securities and Exchange Commission.
The decision allows the Trump-linked business to act as a bank, issuing digital currency to clients for transactions. Clients would exchange the U.S. dollar for the stablecoin, with profits going directly to the Trump family’s crypto business.
Trump himself has made more than $1.4 billion in business revenue from his family's crypto ventures, according to his released financial disclosures.
The deal later came under scrutiny when the Trump administration then agreed to supply the UAE with highly coveted American-made AI chips despite prior administration concerns that they may make their way to China.
"We thank MGX and Binance for their trust in us, and I think it's only the beginning," World Liberty Financial co-founder Zach Witkoff said after announcing the deal, alongside the president's son Eric Trump at a crypto convention in Dubai.
Witkoff is the son of the president's special envoy to the Middle East, Steve Witkoff.
Ranking Member of the Committee on Banking, Housing and Urban Affairs Sen. Elizabeth Warren, D-Mass., urged the OCC to halt approval of Trump-linked business ventures, writing a letter to the comptroller in January. As an executive branch office, the president has ultimate authority over the OCC, though the office considers itself independent.
"For the first time in history, the president of the United States would be in charge of overseeing his own financial company," Warren wrote.
Following the OCC's preliminary approval, Warren described the decision as the "most brazen act of self-dealing our financial system has ever seen."
"I’m introducing a bill to stop this kind of unprecedented corruption," Warren said in a post on social media.
"The Comptroller and staff acted consistently with their statutory duties and ethical obligations with respect to the Application," the OCC wrote Friday. "OCC staff reviewed this Application in accordance with the agency’s established policies and procedures."
The charter application will not be fully approved until some conditions are met, including increasing the company's capital, the OCC said.