World Liberty Financial (WLFI) seeks a U.S. trust bank charter to issue USD1 stablecoin, expanding regulated stablecoin custody and conversion services.
World Liberty Financial (WLFI) has taken a major regulatory step toward mainstream finance integration. The company this week confirmed a national trust bank application filing. The move is aimed at direct issuance and custody of its USD1 stablecoin, the direct. Therefore, institutional adoption could be sped up under federal supervision.
WLFI Files OCC Application for National Trust Bank
Based on WSJ, WLFI made a de novo application with the OCC. The filing was done on Wednesday by its entity, World Liberty Trust Company. The OCC is an arm of the Treasury Department and is responsible for chartering and supervising national banks. It is presently overseeing around 60 national trust banks across the country.
Moreover, crypto platform Anchorage Digital is the only digital asset company to have such a status. As such, approval would put WLFI in a very select group. A direct issuance, redemption, and custody of USD1 stablecoin is possible using the application. It is also enabling stablecoin conversion services for institutions.
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WLFI is known as the flagship crypto venture of the Trump family. Therefore, its move represents an increasing political and financial attention towards digital assets. The company said that USD1 had more than $3.3 billion in circulation in the first year alone.
In addition, the trust bank proposed to provide fee-free conversion between U.S. dollars and USD1 at launch. Services would expand slowly after approval, the firm said. Initially, the focus of offerings will be on institutional clients that require compliant custody solutions.
Trust Bank Structure Aligns with GENIUS Act Rules
The proposed trust bank will be in accordance with the recently passed GENIUS Act. That law established a federal regulatory framework for stablecoins. As a result, World Liberty aims to conform to increased compliance standards from the beginning. These include AML controls, sanctions screening, and advanced cybersecurity protocols.
Mack McCain, general counsel of WLFI, will serve as trust officer. He will be responsible for fiduciaries with World Liberty Trust Company. McCain stressed the long history of the OCC’s supervision of trust activities.
Furthermore, the trust bank will be subject to periodic examination by the regulators. These measures bring clarity in the form of banks and asset managers. Consequently, there is scope for institutions to extend the use of the USD1 through a familiar framework.
USD1 stablecoin is fully collateralised with U.S. dollars stored at controlled depository institutions. It is also supported by money holding short-duration U.S. Treasury obligations. This is a reserve design that is designed to provide liquidity and stability in times of market stress.
The stablecoin is currently running on 10 blockchain networks. These include Ethereum, Solana, BNB Smart Chain, TRON, Aptos, and AB Core. Such coverage facilitates near-instant cross-border payments. It also allows for tokenized settlement and programmable enterprise payouts.
Overall, the WLFI application is part of a larger trend in the industry toward federal regulation. Banks of a Stablecoin are becoming more and more interested in getting some banking-style supervision so they can attract institutions. If the trust bank is approved, it could strengthen USD1’s market position.
Source: https://www.livebitcoinnews.com/wlfi-moves-toward-u-s-trust-bank-status-for-usd1-stablecoin/
