(Reuters) – Five Democratic senators, led by Elizabeth Warren, sought answers regarding World Liberty Financial, a crypto project backed by President Donald Trump and family, and its newly announced plans to issue a stablecoin, the Wall Street Journal reported on Friday citing a letter.
The lawmakers warned U.S. financial regulators of a potential “extraordinary conflict of interest” in overseeing the cryptocurrency entity, the Wall Street Journal said.
The letter was sent early Friday, addressed to the Federal Reserve’s vice chair of bank supervision Michelle Bowman and acting comptroller of the currency Rodney Hood, according to the Journal.
The senators questioned how regulators would manage oversight given the company’s ties to the sitting president, the report said.
Legislation moving through Congress would set up a regulatory structure for stablecoins, digital currencies that act as dollar-like instruments for storing value or purchasing other crypto assets, as per the report.
The bill would designate the Federal Reserve and the Office of the Comptroller of the Currency (OCC) as overseers, while laying out specific standards for reserves and consumer protections, the report added.
The Federal Reserve declined to comment. The White House and Office of the Comptroller of the Currency (OCC) didn’t immediately respond to Reuters request for comments.
Founded two months before Trump’s victory in the U.S. presidential election, World Liberty’s creation was announced by Trump, his three sons and the wealthy real estate businessman Steve Witkoff, who is now Trump’s Middle East envoy.
Trump’s aides have said he has handed over control of his business ventures, which are being reviewed by outside ethics lawyers
On Tuesday, World Liberty Financial said it will launch a stablecoin, called USD1, adding that it will be fully backed by U.S. Treasuries, dollars and other cash equivalents and is designed to keep a value of $1.
(Reporting by Bipasha Dey in Bengaluru; Editing by Chizu Nomiyama)
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