Crypto observers were speculating on Monday that World Liberty Financial (WLFI), the decentralized finance (DeFi) platform backed by U.S. President Donald Trump and his family, might be testing its long-awaited dollar stablecoin before rolling out for the broader public.

Blockchain sleuths earlier today noted a flurry of activity with a token labeled as World Liberty Financial USD (USD1) on blockchain monitoring websites Etherscan and BscScan. Blockchain data shows that USD1 was deployed earlier this month on the Ethereum and BNB Chain networks and series of transactions with the token occurring over the past couple weeks.

Some transfers included addresses linked to Wintermute, a large digital asset trading firm and market maker, and crypto custodian BitGo, according to Arkham Intelligence data. The token’s supply currently stood at around 3.5 million-3.5 million on Ethereum and BNB Chain, per Etherscan and BscScan.

Changpeng CZ Zhao, founder of crypto exchange giant Binance, brought widespread attention to the token by “welcoming” the project on BNB Chain in a post with a screenshot of the USD1 BscScan profile shared with his 10 million followers. The post, he later said, triggered a wave of copy-cats aiming to capitalize on the new-found attention.

WLFI, reacting in a X post, said USD1 is not currently available for trading and crypto users should beware of scams.

Stablecoin buzz

WLFI, a project spearheaded by Zachary Folkman and Chase Herro, made a splash last year as one of the first crypto projects enjoying the backing of Trump. The protocol aims to provide a blockchain-based marketplace where users can borrow and lend cryptocurrencies, create liquidity pools and transact with stablecoins.

It’s been widely known that the project is working on crafting its own stablecoin, but there hasn’t been any official communication about exact plans and timing of launching the token publicly. CoinDesk has reached out to the team, but hasn’t received any replies.

Stablecoins are one of the fastest-growing corners of the crypto industry and widely regarded as the killer use case for blockchains. With their prices pegged to an external asset, predominantly to the U.S. dollar, they are widely used as a crypto trading pair and transactions on blockchain rails. They are also increasingly used for everyday payments, remittances and savings, attracting the attention of many venture capital investors.

Buzz around the asset class rejuvenated over the past months as the Trump administration elevated stablecoin regulation to the top of its crypto agenda. Treasury Secretary Scott Bessent said that stablecoins have a key role in preserving the U.S. dollar’s global role as a reserve currency.

Berachain is rolling out the next phase of its proof-of-liquidity system, expanding governance and emissions beyond its native BEX pools. 

Up until now, only Berachain’s (BERA) native exchange, BEX, was used to distribute rewards. Other decentralized applications will be able to apply for incentives through new reward vaults starting on Mar. 24, according to Berachain’s official announcement. This will help them expand by drawing liquidity.

Liquidity pools from multiple decentralized finance platforms have been included in the initial set of vaults, with more to be added later. This has opened up a more transparent system where users have more control over how incentives are allocated and projects vie for rewards.

With Berachain’s PoL model, assets remain active in DeFi, in contrast to traditional proof-of-stake blockchains, where users lock up tokens for security. Network activity is limited in PoS systems because staked tokens are frequently not available for lending or trading.

The system used by Berachain ensures that validators send back some rewards to the network rather than keeping them. Applications that boost activity on the blockchain and aid in its growth receive these rewards. The governance token, BGT, gives holders the ability to vote on which validators and projects receive support, thereby determining how these rewards are distributed.

The first approved vaults focus on DEX liquidity pools, which allow users to swap tokens easily. These pools were selected based on their liquidity, security, and importance to the network. Liquidity pairs on BEX, Kodiak, Beradrome, and other protocols featuring key assets like BERA, HONEY, and BGT, as well as major stablecoins, are among the first approved vaults.

Berachain has grown rapidly since launching its mainnet on Feb. 6. The platform now has $3.1 billion in total value locked and almost $1 billion in circulating stablecoins. The trading volume in February alone was $1.9 billion, according to DefiLlama data. 

Following launch, BERA hit an all-time high of $18.82 before falling to its present range of $6.03–$6.93. The network has a fully diluted volume of $3.37 and a $728 million market capitalization as of Mar. 24. The new governance initiative is expected to attract more users and contribute to further growth of the blockchain.

The German financial supervisory authority BaFin said it identified “serious deficiencies” in Ethena’s USDe token, which the company calls a synthetic dollar, and forbade the issuer from offering it to the public with immediate effect.

The European Union’s Market in Crypto Assets (MiCA) regulations for issuers of stablecoins, tokens whose value is tied to another asset, took effect on June 30 last year. Ethena GmbH has been issuing USDe since June 28, according to BaFin. Companies were allowed to continue issuing their tokens while applying for a MiCA license, unless ordered to stop.

“During the ongoing licensing process, BaFin has identified, among other things, serious deficiencies in the bank’s business organization and violations of MiCAR requirements, such as those regarding asset reserves and compliance with capital requirements,” the regulator said.

USDe counts as an asset-referenced token because it is “a crypto asset whose value stability is to be maintained by reference to other assets, rights, or currencies,” BaFin said.

Ethena is the yield-generating protocol that markets the $5.4 billion token as a “synthetic dollar” with its price anchored at $1. The token uses cryptocurrencies including bitcoin (BTC) and ether (ETH) as backing assets, pairing them with an equal value of short perpetual futures positions on various exchanges.

The strategy generates income for the protocol when perpetual funding rates are positive and passes on some of the income as yield to those who stake USDe (sUSDe). The protocol also issues the USDtb stablecoin, backed by BlackRock’s tokenized Treasury bill fund.

“BaFin also has reasonable grounds to suspect that Ethena GmbH is publicly offering securities in Germany in the form of ‘sUSDe’ tokens of Ethena OpCo. Ltd. without the required securities prospectus,” the regulator said.

Ethena said on X that it will “continue to evaluate alternative frameworks,” after being notified that the “application under the MiCAR regulatory framework will not be approved.”

Ethena’s governance token, ENA, had dropped 6.5% in the past 24 hours, extending losses following the announcement, according to CoinMarketCap data.

Krisztian Sandor contributed to this article.

UPDATE (March 21, 16:37 UTC): Adds MiCA in second paragraph, regulator quote in third, USDe explanation starting in fifth.