A blockchain platform associated with U.S. President Donald Trump has invested $10 million in Falcon Finance to support the development of stablecoin infrastructure, the two companies announced jointly on Wednesday.
This investment aims to enhance the liquidity and interoperability between two stablecoins: Falcon USD (USDf) and World Liberty Financial USD (USD1), the latter of which is a token launched by the Trump-associated World Liberty Financial (WLFI) platform in March of this year.
Falcon Finance stated that it will use the $10 million investment to build shared liquidity, multi-chain compatibility, and rapid conversion infrastructure between USDf and USD1.
The USD1 token, associated with Trump’s son Eric, will also be used as collateral for Falcon Finance.
According to Eric Trump, during a panel discussion at Token2049 in Dubai, USD1 was used in May to settle MGX's $2 billion investment in the Binance exchange.
Zak Folkman, co-founder of World Liberty Financial, noted that this partnership aims to create a "more robust and flexible digital dollar infrastructure" for retail and institutional participants.
Folkman further added that Falcon's over-collateralization model combined with USD1's reserve-backed framework will help provide a reliable synthetic dollar alternative for global retail and institutional users.
Falcon Finance's synthetic dollar protocol accepts various collateral assets under its over-collateralization model. The one-to-one redeemability and reserve backing of USD1 are intended to serve as additional collateral, complementing Falcon's synthetic dollar products.
Cointelegraph could not independently verify the authenticity of the $10 million investment.
Three weeks before this announcement, Falcon's USDf had fallen below its expected $1 peg on July 8, dropping to a low of $0.9783, raising investor concerns about the collateral quality of this synthetic over-collateralized stablecoin. USDf returned to parity with the dollar on July 14.
The USD1 from the WLFI platform also lost its dollar peg, dropping to $0.9954 on Tuesday. According to CoinMarketCap data, this stablecoin has yet to recover its dollar parity, trading at $0.9993 at the time of writing.
The utility of stablecoins associated with the Trump family is continuously growing in the cryptocurrency space. However, some industry observers are concerned that the Trump family's increasing involvement in the cryptocurrency sector may complicate the passage of emerging U.S. blockchain legislation.
According to Bloomberg, cryptocurrency-related venture capital has added at least $620 million to Trump's wealth, bringing his net worth to over $6 billion.
Meanwhile, political divisions in the U.S. Congress regarding cryptocurrency legislation are deepening, with some Democratic leaders in the House announcing they will work together to oppose Republican attempts to pass what they call "dangerous" legislation.
Maxine Waters, a senior Democratic member of the House Financial Services Committee, pointed out: "[The Republicans] are doubling down on pushing a package of dangerous cryptocurrency legislation through Congress quickly."
Waters specifically criticized the "Anti-Central Bank Digital Currency Surveillance National Act"—a Republican-backed bill that would prohibit the launch of a U.S. central bank digital currency—and the "CLARITY Act," which aims to define the structure of the digital asset market.
She emphasized: "In addition to lacking urgently needed consumer protections and national security safeguards, these bills would make Congress an accomplice to Trump's unprecedented cryptocurrency scams."
Related: Robinhood's cryptocurrency revenue doubles, CEO makes a big bet on asset tokenization
Original: “Trump-associated WLFI invests $10 million in Falcon Finance for stablecoin development”
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