MarketsStablecoinTrump
|3 min ReadTrump's USD1 Buys $3B Relevance With 20% Yields
Tariq Al-Saidi
Senior Analyst
Published
Jan 16, 2026
The stablecoin hierarchy is being aggressively disrupted by the Trump-affiliated World Liberty Financial (WLFI), which has used raw capital injection to force its USD1 stablecoin to a market cap of $3.37 billion. This expansion is not organic; it is engineered through treasury-funded incentives that have captured roughly 1.8% of USDT's dominance. The protocol is effectively buying its seat at the table, using high-yield partnerships to bypass the slow grind of natural adoption.
Mercenary Capital & The 20% Yield Trap
Growth has been manufactured largely through a lucrative partnership with Binance that offered an annualized yield of 20% starting December 24, 2025. This yield farming opportunity triggered a mercenary rush that pushed issuance from 2.7 billion to over 3 billion in days. WLFI governance doubled down on this strategy on January 5, approving the use of treasury funds to sustain these incentives with a 77.75% approval rate, proving traders are parking capital for the yield, not for settlement utility.
Thin Order Books & Flash Crash Reality
While the topline number looks impressive, the liquidity structure is dangerously brittle. On December 24, a single large market order obliterated the order book, crashing the BTC/USD1 price from roughly $87,000 down to $24,111—a staggering 73% wick. Binance founder CZ dismissed the event as a non-systemic glitch because the pair wasn't in any index, but the volatility exposes the fragility of new trading pairs. Despite generating a massive $5.13 billion in BTC/USD1 volume, the order books lack the depth to absorb whale-tier exits without catastrophic slippage.
The Regulatory Pivot
To solidify this precarious position, WLFI is pivoting from crypto-native incentives to federal legitimacy. On January 8, the entity filed an application with the U.S. Office of the Comptroller of the Currency (OCC) to charter the World Liberty Trust Company, a national bank designed specifically for issuing and custodying USD1. If approved, this would verticalize their operations under a federal charter, attempting to regulate their way into becoming systemically important infrastructure rather than just another farmable token.
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