In the evolving landscape of digital assets, Binance, recognized as the largest cryptocurrency exchange globally, currently maintains a dominant position in the ecosystem of a stablecoin closely associated with the Trump family. This stablecoin, World Liberty Financial USD (USD1), reportedly sees an overwhelming majority of its supply controlled by Binance, illustrating a significant concentration of assets within a single exchange platform.
Data provided by Arkham, an on-chain analytics firm, indicates that Binance holds approximately $4.7 billion of USD1's total supply of $5.4 billion. This equates to nearly 87% of the entire USD1 stablecoin supply being managed within Binance-controlled wallets. This concentration level surpasses that of any other known third-party exchanges among the top stablecoins ranked by market capitalization.
For comparative context, Binance's holdings of other major stablecoins are considerably lower. It holds around 10% of Tether (USDT), the largest stablecoin by market cap, and maintains about 12.37% of USD Coin (USDC), both figures significantly beneath Binance's control over USD1. Such disparity underscores a unique concentration risk for USD1 that is not as prevalent in other stablecoins.
It should be noted, however, that following Binance's settlement with the U.S. Treasury Department in 2023, the exchange is prohibited from providing services to American customers. Given this restriction, it is understood that the USD1 tokens held by Binance primarily represent the assets of customers based outside the United States.
Requests for comment addressing this significant asset concentration were directed to Binance and World Liberty Financial, the platform issuing USD1, but responses were not received at the time of reporting.
The rapid ascension of USD1 in the stablecoin market is notable. Designed to maintain a one-to-one peg with the U.S. dollar, USD1 currently ranks as the fourth-largest stablecoin by market capitalization. This position places it ahead of established coins such as PayPal USD (PYUSD) and Dai (DAI), reflecting substantial market traction in a short period.
The stablecoin's prominence was further underscored by its selection as the payment medium for a significant $2 billion transaction involving Abu Dhabi investment firm MGX and Binance in the previous year. This deal has been a focal point for scrutiny from political figures including Senator Elizabeth Warren, who has raised concerns about a possible quid pro quo arrangement between the Trump family, the stablecoin’s backers, and Binance's former CEO, Changpeng Zhao, commonly referred to as CZ.
CZ has consistently denied these allegations, clarifying that the transaction in question should be seen strictly as a payment method rather than an equity investment in World Liberty Financial. Moreover, CZ has hinted at strategic initiatives for Binance’s U.S. affiliate to potentially resume operations, despite the limitations placed on the company following regulatory settlements related to anti-money laundering deficiencies.
Under a 2023 plea agreement, CZ is barred from any operational role within Binance, yet he retains significant influence as a controlling shareholder. His position underscores ongoing leadership continuity at Binance amid regulatory challenges.
This landscape of concentrated stablecoin holdings within a single exchange that is navigating extensive compliance requirements highlights the complex interplay of market growth and regulatory scrutiny within the cryptocurrency sector.