Third White House stablecoin meeting fails to move the needle

The Trump family can’t stop making crypto deals, but the White House is proving far less effective in playing ‘let’s make a deal’ with stablecoin stakeholders.

On January 18, a gaggle of crypto operators, politicians, regulators, and Wall Street CEOs descended on President Donald Trump’s Mar-a-Lago resort in Florida for the inaugural World Liberty Forum. The event was organized by the Trump family’s decentralized finance (DeFi) platform, World Liberty Financial (WLF), and vividly illustrated the increasingly intertwined worlds of crypto and traditional finance.

There were various panel discussions and synchronized nods of agreement by the attendees—none of whom appeared to express much in the way of contrarian views—but the most notable news to emerge from the event was probably the Trumps announcing several new crypto ventures, adding to their already overflowing horn o’ crypto plenty.

For instance, WLF announced further details of its previously teased plans to tokenize the Trump Organization’s real estate holdings. Teaming with real-world asset (RWA) tokenization platform Securitize and real estate developer DarGlobal, WLF plans to tokenize “loan revenue interests” in the Trump International Hotel & Resort, Maldives.

For the moment, only accredited investors can partake in this tokenized opportunity, which offers “exposure to the underlying asset’s performance, including both potential income distributions and the potential for certain profits upon any future sale.” Other Trump Org properties are expected to join this tokenization effort in due course.

In a somewhat related note, WLF announced a “strategic collaboration” with the Apex Group in which the financial services firm will “explore integrating WLFI’s USD1 stablecoin across Apex Group’s broad ecosystem for subscriptions, distributions, and redemptions of tokenized assets,” including WLF’s “real estate and infrastructure holdings.” These presumably include Trump Org properties, as we aren’t aware of WLF having invested in or built any physical structures.

At any rate, Apex’s Vasco de Gama-worthy exploration is intended to “bring regulated stablecoin infrastructure into traditional fund administration services, potentially streamlining settlement and improving operational efficiency” for Apex’s institutional clients. The collaboration will include an Apex pilot of “a permissioned USD1 stablecoin.”

There’s been no shortage of controversy over the recent revelation that a top UAE government official purchased a 49% stake in WLF just days before President Trump took his second oath of office in January 2025.

The fact that this investment went unreported for over a year, coupled with the UAE’s previous financial connections to WLF projects, has fueled criticism of the Trump family’s willingness to flout conventional approaches to conflict of interest concerns involving America’s first families.

When CNBC quizzed WLF co-founders Donald Trump Jr. and Eric Trump about the questionable optics of the UAE sale, Don Jr.’s defense was basically ‘everyone’s doing it.’ Playing devil’s advocate, anchor Sara Eisen suggested that everyone attending the Forum was “here to curry favor,” but neither Trump scion took the media bait.

1600 Stablecoin Avenue

Thursday saw the White House host the third meeting in as many weeks of stakeholders in the great stablecoin ‘yield v reward’ debate. Neither of the previous meetings yielded much ground, but with the White House setting an end-of-February deadline to resolve this impasse, the clock is ticking, and the president isn’t known for his endless patience.

In case you’ve forgotten: the Senate Banking Committee’s digital asset market structure legislation (the CLARITY Act) is in a holding pattern (largely) because banks want third-party platforms like the Coinbase (NASDAQ: COIN) exchange to be subject to the same prohibitions as stablecoin issuers under the GENIUS Act. So, no offering yield/rewards/interest to stablecoin holders, because that would cause bank customers to mass withdraw deposits in pursuit of greater financial returns, and this deposit flight would limit banks’ ability to offer loans.

The last draft of CLARITY would have allowed certain ‘activity’-based stablecoin rewards, but these proved too limited for Coinbase and too expensive for the banks. Coindesk reported that the White House suggested to the banking reps in attendance at Thursday’s meeting that at least some of these activity-based rewards were non-negotiable.

However, official comments from stakeholders emerging from Thursday’s meeting have been the usual mix of comments on how ‘constructive’ it all is alongside deferential praise for the administration officials tasked with herding these cats.

Both sides of this debate blame the other for the impasse, and top administration figures have their own opinions. White House advisor Patrick Witt, the referee in these meetings, has at times appeared to suggest that banks should get over themselves, while Treasury Secretary Scott Bessent has likened Coinbase to ‘nihilists’ who believe it’s their way or the highway.

It bears mentioning that the GENIUS Act’s regulations have yet to be written, so the ‘reality’ here is a little more nuanced. It’s also worth remembering that Coinbase derives roughly one-fifth of its revenue from stablecoin rewards. So Armstrong clearly views the banks’ position as a threat to his financial future.

Armstrong also suggested that the U.S. “has to have stablecoin rewards” because China is now offering interest to holders of its digital yuan to boost adoption of the central bank digital currency (CBDC). (For the record, China is vehemently opposed to stablecoins, but never mind.)

There’s been talk that untying this Gordian knot may take President Trump’s personal involvement, which neither side is likely anticipating with much glee. Congress is back from its weeklong break on Monday, so we’ll see if the Senate Banking Committee is ready to schedule any new CLARITY markup sessions.

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Crypto campaign funding finds its footing

Armstrong claims to remain optimistic about CLARITY’s chances of (a) passing out of the Banking Committee, (b) being merged with the companion legislation from the Agriculture Committee, and (c) getting approved on the Senate floor, all before Congress turns its attention to November’s midterm elections.

Brad Garlinghouse, CEO of Ripple Labs, recently suggested there’s an 80% chance CLARITY will be passed by “the end of April.” Sen. Bernie Moreno (R-OH) echoed that timeline in an interview on Wednesday with CNBC, saying, “Hopefully by April.”

Moreno dismissed the suggestion that if CLARITY doesn’t pass while Republicans control both legislative chambers, a Democrat-led Congress could limit the prospects for market structure progress. Moreno doesn’t acknowledge this possibility because he doesn’t see the Dems doing well in November, a belief likely bolstered by the fact that the crypto sector appears eager to thwart the Dems’ chances.

Moreno was the largest recipient of crypto sector campaign funding in 2024, as groups like the Coinbase-supported Fairshake political action committee (PAC) spent $40 million to ensure his victory.

Fairshake very publicly promotes the fact that it has amassed a war chest of $193 million to influence the outcome of the midterms. Fairshake started spending some of that cash last week in primary races in Alabama and Texas.

This week, Politico reported that Fairshake will spend “at least $1 million each” to defeat two candidates in two separate Illinois Democratic primaries for House and Senate races. Both of the targeted candidates—state Rep. La Shawn Ford and state Sen. Robert Peters—voted in favor of state-level legislation aimed at offering greater consumer protections for crypto users than Washington appears willing to support.

Fairshake claimed the two Illinois Dems “pushed draconian rules that would have led to a patchwork of state-by-state rules that kills American competitiveness and job creation and undermines consumer protections … State lawmakers looking to run for federal office should expect to be held accountable for their records.”

Peters retorted that his district’s voters wouldn’t bow to “outside Super PACs funded by Trump-aligned billionaires [who] are dumping millions of dollars into this race to try to buy this seat and subvert the will of the electorate.” Peters believes crypto firms are “all in for my opponent because he’s already shown that he can be bought—and I’ve made it clear that I can’t.”

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Be your own Treasury-dependent bank!

As a social media maven observed this week, Google (NASDAQ: GOOGL) searches for ‘Bitcoin going to zero’ are currently higher than they’ve been since 2022 (which marked the onset of the last sustained ‘crypto winter’).

The BTC token is currently on a five-month losing streak after hitting its all-time price high of $126,000 in early October. While unseen forces occasionally boost the price back up to $70,000, these mini-surges don’t last, and BTC was struggling to stay above $66,000 as of Thursday morning.

While there is no shortage of opinions/conspiracy theories about why BTC can’t shake its downward spiral, a new report from market-maker Keyrock claims BTC is “historically the most liquidity-sensitive asset in public markets.” Keyrock analyst Amir Hajian claims that “for every 1% change in global liquidity, Bitcoin has moved 7.6% over the following quarter. That is over 3x the NASDAQ.”

Hajian also claims U.S. Treasury bill issuance shows “the strongest leading relationship with Bitcoin,” and since the T-bill issuance cycle “is in headwind territory,” this is why BTC is suffering its longest and most severe drawdown in nearly four years.

But fear not, because “a $3-4 trillion annual refinancing wave” is arriving later this year, and as T-bill issuance increases, “that impulse would be expected to feed through to Bitcoin by late 2026 / early 2027.”

Reading this, one can’t help but recall the famous Times newspaper headline that Bitcoin inventor Satoshi Nakamoto embedded in Bitcoin’s Genesis block in 2009: “U.S. Treasury on brink of second bailout for BTC.” Lest we forget…

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