World Liberty's USD1 bank charter backed by Abu Dhabi sheikh's 49% stake

The Office of the Comptroller of the Currency granted World Liberty Financial preliminary approval for a national trust bank to issue its USD1 stablecoin, a $4 billion asset backed by Abu Dhabi's national security adviser.

Chief Executive Zach Witkoff, son of U.S. Middle East envoy Steve Witkoff, said the approval shows the venture's legitimacy. "There's over $4 billion of USD1 in circulation and over a billion dollars trades every single day in volume," Witkoff told CNBC's "Squawk Box," adding that the metrics "speak to customers actually using it."

The OCC's preliminary conditional approval, granted in mid-August, would let World Liberty issue, redeem and custody USD1 directly, cutting out BitGo, the trust bank that previously held the stablecoin's reserves. USD1's $4 billion market value generates an estimated $150 million a year in interest from U.S. Treasury holdings. The bank's holding company, WLTC Holdings, is 49% owned by StringZ Holding RSC, an Abu Dhabi-registered entity backed by Sheikh Tahnoon bin Zayed al Nahyan, with a Trump-affiliated entity holding 38%.

The charter, if finalized, would make World Liberty the first federally chartered stablecoin issuer to hold reserves directly under the Genius Act signed in July 2025 — a more institutionally embedded position than Circle's USDC. But the ownership structure, which steered $263 million of a $500 million January 2025 investment to Trump family entities, has drawn scrutiny from Senator Elizabeth Warren and 40 Democratic lawmakers over national security and regulatory integrity.

A $500 million investment and a bank charter

Sheikh Tahnoon, the UAE's national security adviser and brother of its president, oversees a more than $1.3 trillion empire funded by his personal fortune and state money. His investment in World Liberty came through Aryam Investment 1, signed four days before Trump's inauguration, and directed $263 million to Trump family entities, according to the president's most recent financial disclosure. The Trump family also realized about $515 million from token sales and $65 million from equity sales in 2025, per the disclosure.

The OCC required three shareholders — including StringZ and the Trump-affiliated entity — to sign passivity commitments confirming they would not seek to influence management or control the bank. Such agreements are relatively unusual in banking applications; the World Liberty agreements are only the second time the OCC has required them since Trump re-entered the White House.

Binance ties and governance friction

A confidential portion of World Liberty's banking application revealed a partnership contract, signed in December, in which World Liberty paid Binance to provide marketing and promotional support for USD1. Binance executive Helen Tu wrote in July that the exchange "has been a key contributor" to USD1, with almost 90% of the cryptocurrency held on Binance and its own blockchain as of June. World Liberty said less than 65% of USD1 is currently in circulation on Binance and the number is decreasing.

USD1 has also experienced minor de-pegging events, and governance disputes involving investor Justin Sun, the Tron founder, have periodically surfaced. In May 2025, Abu Dhabi-linked investment firm MGX used $2 billion in USD1 to fund an investment in Binance.

If the OCC finalizes the charter, a federally chartered stablecoin issuer would occupy a more institutionally embedded position than Circle, which has long positioned USDC as the regulated alternative to Tether. A change in administration could bring intensified scrutiny of every approval World Liberty has received; if the current regulatory environment persists, the head start on a bank charter could prove an enormous competitive moat.

This article is for informational purposes only and does not constitute investment advice.