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.