WLFI, a Trump -backed company, came to the agenda with its new stabilcoin, while Binance’s former CEO Changpeng Zhao (CZ) warned users against fraud, stating that this stabilcoin is not yet open to trading. Recently, the increase in speculation of the World Liberty Financial (WLFI) has led to the CZ to make a statement on this issue.

Speculation about USD1 increased

CZ, on March 24 in the X sharing on the X, USD1 stabilcoin Binance Smart Chain (BSC) announced a smart contract. This sharing caused rumors that Binance could cooperate with World Liberty Financial (WLFI) in the community.

However, after a few hours, CZ stressed that the USD1 cannot be traded yet with a new sharing that clarifies the issue and that it should be careful against fraud attempts. Thereupon, WLFI’s official X account also supported the CZ’s descriptions and announced that the USD1 is not open to purchase and sale.

Stabilcoin plans and regulatory obstacles of Trump -supported WLFI

WLFI is known as one of the projects related to former US President Donald Trump. Last year, the company announced that it plans to launch its own stablecoin and brought Paxos’ founding partner Rich Teo to the stabilcoin operations.

The stabilcoin market is strictly controlled by regulatory authorities. For example, popular stabilcoins such as USDT and USDC are under great pressure to comply with reserve transparency and financial regulations. It is not yet clear how WLFI will provide reserve management for USD1 and how to overcome regulatory barriers.

Stabilcoin competition and the future of USD1

The stabilcoin market has strong competitors such as TETHER (USDT) and USD Coin (USDC). In order for a new Stabilcoin to be successful, he must be accepted in the market and establish strong partnerships. However, large stock exchanges such as Binance and Coinbase have partnership with different stabilcoin projects. Binance supports FDUSD Stabilcoin, while Coinbase is one of USDC’s common exporters. This may make it difficult to list the USD1 on large stock exchanges.

WLFI is thought to target big gains by exporting stabilcoin. Companies such as Tether (USDT) are invested in billions of dollars in income by investing customer deposits in assets that bring interest rates such as US treasury bills. However, in order to successfully implement this model, a strong financial infrastructure and regulatory approval are required.