The USD1 stablecoin, backed by US President Donald Trump, has been picked as the mode of payment for MGX’s purchase of a minority stake in Binance. The development was reportedly announced by Trump’s 41-year-old son, Eric, at the ongoing Token2049 event in Dubai. Addressing the attendees on Thursday, May 1, Trump claimed that the USD1 is being designed as the most transparent and regulated stablecoin in the world. Its use to facilitate the deal is expected to demonstrate how the USD1 could process instant cross-border transactions soon after its launch.
Milestone Moment for Crypto
This year, in March, Binance sold its first-ever minority stake for $2 billion (roughly Rs. 17,403 crore) to a third party. With this, MGX, a sovereign wealth management fund from Abu Dhabi, became the first outsider shareholder of Binance.
At the time, when Binance founder Changpeng Zhao had announced the development, he had disclosed that the transaction would be “100 percent” facilitated by stablecoins – making it the largest single crypto transaction to date.
World Liberty Financial (WLF), the Web3 firm launched by President Trump and his associates last year, will be overseeing the development and launch of this stablecoin.
Things to Know About USD1
The WLF reportedly launched the USD1 token very quietly in April. CoinMarketCap also shows the USD1 token ranking in the 288th position on its index with a market cap of $137.02 million (roughly Rs. 1,160 crores).
The reserves for the USD1 will be under the custody of BitGo and its liquidity will be managed by brokerage service BitGo Prime, the WLF had said in a statement in March.
For the first phase, the USD1 tokens are being minted on two blockchains — Ethereum (ETH) and Binance Smart Chain (BSC). In the later stages, however, the stablecoin will be linked to other blockchain protocols as well.
Talking about the USD1 at the Token2049 event, Trump said that it will be backed by “short term treasury and cash equivalent that can be sent across borders in a very seamless way”, the Coindesk report said.