The USD1 stablecoin, issued by World Liberty Financial Inc. (WLFI), a financial entity affiliated with former President Donald Trump, has seen a remarkable surge in market capitalization. In just under a week, the market cap of USD1 skyrocketed from $128 million on April 27 to over $2.1 billion by early May, marking a staggering 1,540% increase. This surge has propelled USD1 to become the seventh-largest stablecoin in the global market.
The rapid growth of USD1 can be attributed to a series of significant token mints recorded on BscScan, the block explorer for Binance Smart Chain, where a majority of USD1 tokens are minted. Between April 27 and April 30, there were several large mintings, some exceeding $90 million per transaction. These events led to a substantial increase in supply, pushing USD1 past the $2 billion market cap milestone by April 30, as reported by CoinGecko, CoinMarketCap, and DefiLlama.
One of the key drivers behind this growth was the announcement made on May 1 by Abu Dhabi-based investment firm MGX, revealing plans to utilize USD1 for a $2 billion investment in Binance. This partnership represents one of the first major institutional use cases for the newly launched stablecoin and likely contributed to the extraordinary expansion of USD1’s supply.
USD1 officially launched in April following an announcement from WLFI in March. The stablecoin is designed to maintain a 1:1 peg to the U.S. dollar and is fully collateralized by short-term U.S. Treasuries, USD bank deposits, and cash equivalents. With nearly 90% of its current investor base located outside the United States in regions such as Europe, Asia, and Latin America, USD1 has garnered significant popularity.
Centralized exchanges like HTX have quickly listed USD1 in response to the growing demand, offering zero-fee withdrawals on the BEP-20 network. The majority of USD1’s total supply is currently on Binance’s BNB Chain, with a smaller portion on Ethereum.
While the stablecoin market is largely dominated by industry giants like Tether (USDT) and Circle (USDC), USD1’s rapid success indicates a growing global interest in politically backed or alternative stablecoin models. This trend is particularly evident amidst the geopolitical and regulatory shifts shaping the future of digital finance.
In an effort to promote on-chain adoption, WLFI launched a community vote to airdrop USD1 to $WLFI holders, receiving overwhelming approval within hours. The airdrop aims to test the project’s Ethereum-based distribution system and reward early supporters, with voting open until May 14.
Despite concerns surrounding Trump’s political affiliations and foreign backing, WLFI maintains that there is no direct involvement from the Trump family. Since its inception in 2024, WLFI has raised $550 million and is positioning USD1 to rival stablecoin giants like USDT and USDC. In January, the former president issued an executive order highlighting stablecoins as a crucial component of the United States’ digital financial leadership strategy.
In conclusion, the meteoric rise of USD1 to a $2.1 billion market cap showcases the potential of politically backed stablecoins in the global market. As USD1 continues to gain momentum and challenge industry leaders, the stability of its peg and its ability to maintain investor trust will be key factors to watch in the future.