A Trump-linked stablecoin has crossed a $5 billion market cap in under a year, while the U.S. President’s official meme coin has collapsed more than 94% from its peak, as capital flows shift toward yield-bearing, institution-friendly stablecoins.

World Liberty Financial’s dollar-backed stablecoin USD1 surpassed $5 billion in market capitalization this week, making it the fifth-largest stablecoin less than a year after its launch, according to CoinGecko data.

Over the same period, the Solana-based Official Trump (TRUMP) meme coin has fallen more than 93% from its all-time high of roughly $75, and is now trading at $4.66.

"Built in America, designed for real-world scale, and adopted by serious institutions,” World Liberty Financial co-founder Donald Trump Jr. tweeted on Wednesday. “This is what happens when you focus on infrastructure over noise."

USD1's ascent comes as World Liberty Financial applied to form a national trust bank to the U.S. Office of the Comptroller of the Currency.

If approved, the proposed World Liberty Trust Company will handle USD1's issuance, redemption, conversion services, custody operations, and reserve management under direct federal supervision.

USD1 under scrutiny

USD1 first gained prominence after it was used in a $2 billion investment in Binance from Abu Dhabi-based sovereign wealth fund MGX, with the capital paid in USD1—a move that drew scrutiny from U.S. lawmakers including Senator Elizabeth Warren (D-MA) over potential conflicts of interest.

Addressing the deal, Binance founder Changpeng Zhao recently told CNBC the arrangement had been “misconstrued,” saying that MGX chose USD1 and that he requested crypto payment because “I don’t want to deal with banks, really.”

Following the MGX deal and CZ’s presidential pardon, USD1 was integrated into Binance’s core infrastructure last month.

Last month, Warren warned Treasury Secretary Scott Bessent and Attorney General Pam Bondi that USD1 could pose national security risks, citing its trading on decentralized exchange PancakeSwap, where blockchain data showed $263 million in North Korea–linked laundered funds, and the DEX’s liquidity partnership with World Liberty Financial to promote USD1 pairs.

TRUMP slumps

Meanwhile, the TRUMP meme coin, launched days before Trump’s second inauguration, has sharply declined. "Utility is starting to win over pure hype,” Narek Gevorgyan, founder and CEO of CoinStats, told Decrypt, regarding USD1’s growth and TRUMP token’s crash.

Gevorgyan noted that insiders extracted over $800 million from the TRUMP token before the narrative collapsed, leaving what he described as a high-risk technical trade with credibility that's "probably gone for good."

Lawmakers have raised concerns regarding TRUMP over conflicts of interest, foreign influence, and the risk of a future rug pull once the token's three-year lockup expires, with Sen. Warren noting in January 2025 that the Trump Organization controlled 80% of the meme coin's supply.

Peter Chung, head of research at Presto Labs, told Decrypt the TRUMP token's decline reflects "a memecoin-wide phenomenon, not specific to Trump or politics," noting that USD1's recent growth is happening primarily offshore through programs like Binance rewards.

The broader stablecoin sector has grown substantially following last year's passage of the GENIUS Act, which created a federal regulatory framework for dollar-pegged cryptos.

Total U.S. dollar stablecoin supply now stands at $312 billion, per CoinGecko data, with users on Myriad, a prediction market owned by Decrypt’s parent company Dastan, seeing just a 2% likelihood that the sector’s market cap will surpass $360 billion before next month.

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