Binance concentrates usd1 stablecoin liquidity as Trump-linked token surges in market share

Amid rising political scrutiny, the usd1 stablecoin has rapidly expanded its footprint across the crypto market, with Binance now at the center of its liquidity.

Binance holds 89% of USD1 supply on exchange

Blockchain intelligence platform Arkham reports that Binance now custodies an overwhelming 89% of the Donald Trump family-linked USD1 stablecoin. According to DeFi analytics site DefiLlama, the dollar-pegged token, issued by World Liberty Financial, has $5.4 billion in circulation. However, that concentration on a single centralized venue is unusual even in the highly consolidated stablecoin sector.

USD1 is a dollar-pegged token tied to World Liberty Financial, the crypto venture openly backed by the US president’s family. Moreover, its rapid rise has made it a focal point for debates around political influence and digital asset markets. The large share held on one exchange raises questions about liquidity resilience should Binance face market or regulatory shocks.

Jessica Jung, a member of Binance’s global PR team, stressed that high balances do not imply ownership. “Liquidity follows user demand and we work hard to meet demand and serve our users,” she told DL News. That said, Jung emphasized that Binance’s role is primarily infrastructural, aimed at meeting user trading and custody needs rather than managing proprietary exposure to USD1.

Binance program drives incentives for USD1

To be clear, Binance’s custody of USD1 tokens reflects customer deposits, with external custodial arrangements long established across traditional finance and crypto. Still, no other major stablecoin currently has such a large proportion held on a single third-party exchange. This concentration underscores Binance’s central role in the token’s liquidity, distribution, and custody.

In December, Binance launched a dedicated programme designed to promote usage of USD1 on its platform. It offers up to 20% yield on USD1 holdings of up to $50,000, a level that stands out in the broader stablecoin market. Moreover, those incentives have likely contributed to increased deposits and trading volumes, reinforcing Binance’s dominance over the token’s on-exchange supply.

Jung said Binance treats USD1 similarly to other listed assets. “Our involvement with World Liberty Financial-related products, including USD1, is limited to standard listing, infrastructure, and market-access services that we provide to a wide range of projects on consistent terms,” she noted. However, the combination of user demand and attractive yields has effectively concentrated much of USD1’s live float on the exchange.

Backing assets and regulatory ambitions

The usd1 stablecoin is backed by a pool of US government bonds, dollar deposits and other cash equivalents, according to project disclosures. Such a reserve structure mirrors that of several leading dollar-pegged tokens that rely on short-term Treasury securities and bank holdings to maintain stability. Moreover, this composition is intended to reassure institutional users and regulators about liquidity and credit quality.

World Liberty Financial is also pushing into regulated finance. In January, the company applied for a US banking license, signaling ambitions that extend beyond a single crypto token. Co-founder Zak Folkman told DL News at the time: “We believe the best path to broader adoption, including everyday transactions, is to establish USD1 as the preferred stablecoin for major institutions, enterprises, and consumers, too.” That application, if approved, could further integrate USD1 into traditional payment and treasury systems.

USD1’s growth has been striking. It is now the fifth largest stablecoin by circulation after jumping over 50% in the past month alone. However, that rapid expansion has arrived alongside escalating criticism of the president’s family involvement in the crypto industry, creating a complex mix of financial innovation and political controversy.

Political backlash and conflict-of-interest concerns

House Democrats have accused the 79-year-old president of self-dealing, foreign influence, and obstruction of justice tied to his family’s activities in digital assets. These allegations have sharpened focus on the USD1 project and on World Liberty Financial’s investors and partners. Moreover, they have added a new political dimension to what would otherwise be a routine discussion about stablecoin design and market share.

Political scrutiny is not limited to the token’s reserve model or usd1 circulation growth. In November, a 60 Minutes investigation linked a $2 billion investment deal between Binance and Abu Dhabi’s MGX to Donald Trump’s presidential pardon for the exchange’s co-founder Changpeng Zhao. Critics say the deal, which was conducted using USD1, was structured as a favor in return for the pardon.

Binance CEO Richard Teng and Zhao’s lawyer Teresa Goody Guillen have both dismissed claims that the exchange helped boost the usd1 stablecoin in advance of the pardon. They argue that capital flows and token promotion were driven by market considerations rather than political quid pro quos. However, the timing of the deal and the scale of the investment continue to fuel opposition narratives in Washington.

White House defense and outlook for USD1

The White House has repeatedly rejected allegations of wrongdoing linked to USD1 or World Liberty Financial. “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest,” Anna Kelly, the deputy press secretary, told DL News in January. That said, the administration’s assurances have done little to quiet critics who see USD1 as emblematic of blurred lines between public office and private gain.

Looking ahead, the future of USD1 will hinge on regulatory responses, institutional adoption, and market confidence in its reserves. Binance’s dominant share of the token’s custody gives it outsized influence over day-to-day liquidity, but also concentrates operational risk. Moreover, as World Liberty Financial pursues a banking license and seeks broader acceptance, USD1 will remain a test case for how politically connected stablecoins navigate both markets and governance scrutiny.

In summary, USD1’s combination of rapid growth, heavy reliance on a single exchange, and direct links to the Trump family has made it one of the most closely watched experiments in the stablecoin sector, with Binance’s role central to its evolving narrative.