World Liberty Financial, a cryptocurrency venture backed by former President Donald Trump and his sons, has announced the establishment of a $1.5 billion crypto treasury in partnership with Nasdaq-listed ALT5 Sigma Corporation. This initiative involves ALT5 selling $1.5 billion in shares, with half of the proceeds paid in World Liberty's native cryptocurrency, $WLFI, and the remainder allocated to purchasing more $WLFI tokens, settling existing litigation, paying debts, and funding other activities.
The move underscores the Trump administration's strong support for the cryptocurrency industry, marked by actions such as appointing favorable regulators, dismissing lawsuits, and encouraging financial institutions to embrace digital assets. President Trump, listed as the "co-founder emeritus" of World Liberty Financial, reportedly earned $57 million in fees from the company. His sons, along with Alex and Zach Witkoff, are also co-founders. As part of the deal, Zach Witkoff will chair ALT5, and Eric Trump will join its board. Following the announcement, ALT5's shares rose 2.5%, having climbed over 30% in the past week.
In a related development, Paxos Trust Company, known for issuing PayPal's stablecoin PYUSD, has applied for a national trust bank charter from the U.S. Office of the Comptroller of the Currency . If approved, this would allow Paxos to hold and manage assets and settle payments more efficiently, though it would not permit taking deposits or issuing loans like traditional banks. This marks Paxos' second attempt after its initial application stalled in 2023. Competitors Circle and Ripple have also recently applied for national trust charters, while Anchorage Digital remains the only crypto platform with such a charter. This trend follows the enactment of a new law regulating stablecoins, signed by President Trump, reflecting increasing mainstream integration of digital assets.
Additionally, cryptocurrency company Ripple has agreed to acquire stablecoin infrastructure firm Rail for $200 million. This acquisition aligns with Ripple's strategy to expand its stablecoin operations, particularly its own stablecoin, RLUSD. The deal follows the U.S. Congress passing the Genius Act, which provides a regulatory framework for stablecoins, encouraging broader adoption by institutional investors and financial institutions. Major banks like JPMorgan Chase and Citigroup have shown growing interest in the stablecoin market, currently led by Tether and Circle. Stablecoins are digital tokens backed by traditional assets like U.S. Treasuries and are used for seamless transitions between fiat and cryptocurrencies, with potential applications in cross-border payments. Rail, established in 2021 and supported by Galaxy Digital, provides compliance and banking infrastructure for institutional users. The transaction is expected to close by the end of 2025.
In a significant policy shift, President Trump is expected to sign an executive order allowing cryptocurrency, private equity, and real estate to be included in 401 retirement accounts, potentially unlocking nearly $9 trillion for access to digital assets. This move represents a reversal of prior Labor Department guidance that warned employers against offering crypto options. The order directs the Labor Department to reexamine its rules under ERISA and clarify fiduciary responsibilities concerning alternative assets in retirement plans. Additionally, the SEC will be involved in simplifying self-managed retirement investments in such assets. This development has sparked controversy, with critics, notably Democratic senators like Elizabeth Warren, opposing the measure due to crypto's volatility and risk. They are also wary of including other private assets in retirement accounts.
These developments highlight the Trump administration's proactive approach to integrating cryptocurrency into mainstream financial systems, signaling a significant shift in U.S. policy towards digital assets. The administration's support is evident through various initiatives, including the establishment of a strategic Bitcoin reserve and the promotion of regulatory frameworks conducive to crypto adoption. While these actions have been welcomed by many in the crypto industry, they have also raised concerns among critics regarding potential conflicts of interest and the need for robust consumer protections in the rapidly evolving digital asset landscape.
