United States Senators Elizabeth Warren, Ron Wyden, Chris Van Hollen, Jack Reed, and Cory Booker have raised concerns about the potential conflicts of interest and risks associated with President Donald Trump's launch of the stablecoin "USD1." The senators addressed their concerns to the Office of the Comptroller of the Currency (OCC) and the Federal Reserve (the Fed), emphasizing the need for these independent agencies to maintain their integrity amidst political pressures.
The senators highlighted that President Trump could, in practice, sign legislation that allows his product launch and then oversee regulation of his own financial company, World Liberty Financial, the issuer of USD1. This concern arises as the President attempts to reduce the independence of financial regulators and as Congress deliberates on the GENIUS Act, which would empower the OCC and the Fed to regulate stablecoins like USD1.
However, the senators pointed out the absence of protective measures in the current version of the GENIUS Act. These measures would prevent the President from influencing decisions that might detract from the profitability of his stablecoin project or from directing regulators to take actions that could benefit him and his family.
The senators urged the OCC and the Fed to explain how they will manage potential risks posed by USD1 while resisting political pressure. They also inquired if there are controls in place to prevent undue political influence from the White House in regulatory matters.
The letter from the senators questions how the OCC and the Fed plan to uphold their credibility amidst these challenges. They seek clarification on the agencies' measures to guard against political influence that could compromise their regulatory, supervisory, or enforcement duties.