The World Liberty Financial (WLFI) project, affiliated with the family of the U.S. president, has received preliminary approval from the OCC to establish a trust bank. This event, seemingly routine for regulatory practice, exposes a deep conflict of interest and raises questions about the independence of financial oversight in the era of crypto lobbying.
The application review process took seven months, which is not fast in itself, but the final decision still requires the company to hire an external auditor and maintain strict capital standards. Notably, three key investors, including one of the president's sons, have already agreed to voluntarily limit their influence over the management of the future bank—a step that looks like an attempt to soften inevitable accusations of nepotism.
However, the context of obtaining the license raises far more questions than the fact of its issuance itself. In the first 19 months of Trump's second term, the OCC approved 22 banking licenses—more than in the previous five years combined. And most of these approvals went to fintech companies and digital asset players, including Circle and Coinbase. This dynamic indicates a deliberate pivot by the regulator toward the crypto industry, which cannot but be alarming.
WLFI emphasizes that the federal charter, on the contrary, will strengthen oversight and ensure transparency for the USD1 stablecoin. According to their logic, the future bank will become the custodian of reserves backing the stablecoin, and weekly reports will undergo independent verification. Company representative David Waxman parries criticism by stating that the project is not avoiding control but is moving under the constant monitoring of the OCC, complying with all anti-money laundering and consumer protection requirements.
But opponents, especially among Democrats, see something else in this. They fear that the "stablecoin" will turn into a tool for gaining favor with the White House, and the regulators' lenient approach will only reinforce these suspicions. Aaron Klein, a senior fellow at the Brookings Institution, expressed concern that people are getting the illusion of government support for stablecoins, which is extremely dangerous for financial stability.
Significantly, polls record negative public sentiment: 63% of Americans consider Trump's income from cryptocurrencies inappropriate. This is not just political noise but an indicator of eroding trust in the regulatory system, which should remain neutral.
My analysis: The WLFI situation is a litmus test for the entire American model of digital asset regulation. On the one hand, accelerating license issuance for fintech is a positive signal for innovation. On the other hand, when the speed of approvals coincides with the interests of the president's family, the market will inevitably ask: where does deregulation end and favoritism begin? The transparency of weekly reports is a good step, but it does not remove the systemic risk of conflict of interest, which will haunt the project as long as the connection to the head of state remains obvious.