It was announced that the Trump family-backed stablecoin USD1 will be used for a major 2 billion USD investment by Abu Dhabi-based investment firm MGX into the cryptocurrency exchange Binance.

This transaction marks a milestone in institutional use of stablecoins and highlights the growing role of digital assets in the global financial system. MGX, supported by the government of the United Arab Emirates, is investing 2 billion USD in Binance using the USD1 stablecoin issued by World Liberty Financial, a company with ties to the Trump family, according to Reuters.

transaction details

Zach Witkoff, co-founder of World Liberty Financial, announced the investment at the TOKEN2049 conference in Dubai. USD1 is a US dollar-pegged stablecoin backed by US Treasury bonds, cash, and other liquid assets. The use of USD1 for this transaction demonstrates institutional investors' confidence in the stability and security of stablecoins.

Another significant move by Abu Dhabi into the crypto market came through Mubadala Investment Company, one of the emirate’s leading sovereign wealth funds. In the fourth quarter of 2024, Mubadala invested approximately 436.9 million USD in BlackRock’s iShares Bitcoin Trust (IBIT), according to a filing with the US Securities and Exchange Commission (SEC). This holding represents the purchase of 8.2 million IBIT shares and marks one of the first known instances of a major sovereign wealth fund directly investing in Bitcoin ETFs.

impact on the crypto market

This investment could set a precedent for the use of stablecoins in large-scale institutional transactions. It also reflects the growing interest of governments and large investors in integrating cryptocurrencies into traditional financial structures. Furthermore, the partnership between MGX and Binance could accelerate the development of new stablecoin applications in areas such as cross-border payments and financial inclusion.

The decision to use a politically linked stablecoin like USD1 for one of the largest crypto investments of the year underscores the growing influence of geopolitical actors in the digital finance space. While traditional stablecoins like USDC and USDT have so far dominated the market, the use of USD1 signals a new trend: the strategic positioning of nationally or politically motivated digital currencies in global capital flows. If USD1 manages to establish itself over the long term, it could not only reshape the stablecoin landscape but also reignite the debate over state control and economic sovereignty in the crypto sector.