How Does World Liberty Financial’s USD1 Stablecoin Work And Who Is It Built For?

USD1 is a fiat-backed stablecoin issued by World Liberty Financial (WLFI), pegged 1:1 to the US dollar, and custodied by BitGo Trust Company. Launched on Ethereum and BNB Chain in March 2025, it is backed by cash and short-duration US Treasury bills held through government money market funds. It is not built for everyday retail swaps. From day one, its design and deal flow have pointed squarely at institutional users. Who Is Behind USD1? World Liberty Financial was co-founded by Donald Trump's sons Eric, Donald Jr., and Barron Trump, along with Zach Witkoff and Alex Witkoff, sons of Trump's Special Envoy to the Middle East Steve Witkoff, and DeFi builders Chase Herro and Zak Folkman. Trump himself is listed as "co-founder emeritus" on the project's website, a designation that reflects his stepping back from active involvement after taking office in January 2025. DT Marks Defi LLC, an entity affiliated with Donald Trump and certain family members, owns 60% of the company and is entitled to 75% of all revenue from WLFI token sales. Reuters estimated in a June 2026 report that the Trump family has made more than $2.3 billion in profits across four crypto ventures since the start of Trump's second term, with World Liberty Financial accounting for the largest share. That financial structure is important context for anyone evaluating the project. It means the issuing entity has a direct political and financial relationship with the sitting US president, which has drawn scrutiny from ethics watchdogs and lawmakers alike. The project raised $550 million in its WLFI token sale before USD1 launched. WLFI is the governance token for the broader World Liberty Financial ecosystem. USD1 is the stablecoin built on top of it. Bloomberg projects the venture will generate close to $150 million in profits from USD1 in 2026 alone, driven almost entirely by interest earned on the reserve pool backing outstanding tokens. How Does USD1 Actually Work? USD1 operates on a straightforward mint-and-burn model, standard among fiat-backed stablecoins. Minting happens when a verified institutional counterparty wires US dollars to BitGo's reserve accounts. After verification, World Liberty Financial mints an equivalent amount of USD1 onchain and credits it to the counterparty's wallet. Redemption is the reverse: the counterparty returns USD1 to a designated burn address, the equivalent dollars are wired from reserves, and the burned tokens leave circulation. There are no minting or redemption fees, which matters at institutional scale where transaction costs compound quickly. Retail users typically convert USD1 through exchanges and decentralized exchanges rather than redeeming directly through the primary mint-and-burn channel. What Backs Each USD1 Token? The stablecoin operates on a conservative reserve model, backed entirely by US cash, US government money market funds, and other cash equivalents.