Concerns Over Banking Charter for World Liberty Financial
In a significant move, 41 Democratic members of the House have reached out to U.S. Treasury Secretary Scott Bessent, expressing their concerns over the possible granting of a banking charter to World Liberty Financial – the cryptocurrency venture associated with the Trump family. The lawmakers fear that such an endorsement could undermine the integrity of the U.S. banking system and compromise its autonomy from foreign entities.
Alarming Transactions and Foreign Influence
In their letter, which was sent on Thursday, these representatives pointed to reports indicating that the Trump family’s firm had discreetly divested nearly half of its shares to a royal member from the United Arab Emirates. This transaction occurred shortly before the UAE royal secured a lucrative contract for AI chips with the current administration, raising alarms about foreign influence in American financial institutions.
World Liberty Financial’s Pursuit of a National Trust Bank Charter
World Liberty Financial is in pursuit of a national trust bank charter to bolster its initiatives surrounding the USD1 stablecoin. This financial designation, which falls under the jurisdiction of the Office of the Comptroller of the Currency (OCC) – part of the Treasury Department – would enable the company to expedite its transaction operations related to its stablecoin offering.
“We are no longer merely discussing theoretical aspects of cryptocurrency chartering. This is a pivotal moment concerning foreign investments, national security, and the integrity of our regulatory framework,” stated Rep. Gregory Meeks (D-NY), who spearheaded the letter.
The legislators are particularly concerned about safeguarding the U.S. financial system from potential manipulations by foreign states through the bank-chartering process.
Request for Clarity and Protective Measures
Additionally, the letter sought answers from Secretary Bessent on whether adequate protective measures are in place to prevent foreign governments from exploiting the banking system for leverage. They also inquired about the extent of influence the White House may wield over the OCC’s decisions regarding charter applications.
During a recent congressional hearing, Bessent asserted that the OCC operates independently of the Treasury Department, giving rise to his reluctance to discuss the specifics of World Liberty’s application.
In their communication, Meeks and other Democrats reiterated their request for clarity on the Treasury’s engagement, formal or otherwise, in the chartering process, and asked for a response within a week.
Broad Support and Recent Events
Interestingly, the signatories of the letter included both critics of cryptocurrency and proponents, such as Reps. Ritchie Torres (D-NY) and Sam Liccardo (D-CA). This inquiry was initiated shortly after World Liberty hosted a glitzy event at Mar-a-Lago, attended by various members of the Trump family, celebrities like Nicki Minaj, and prominent executives from leading financial firms including Goldman Sachs, Coinbase, and the New York Stock Exchange. Notably, Changpeng Zhao, the Binance founder who was recently pardoned by former President Trump, was also at the gathering.
