Binance has recently drawn significant attention across the crypto community following a report highlighting its dominant share of USD1, a stablecoin issued by World Liberty Financial (WLFI).
According to a February 9 report by Forbes, Binance and its users currently hold approximately 87% of USD1’s circulating supply, equivalent to around $4.7 billion out of $5.4 billion. On-chain analytics platform Arkham Intelligence reportedly confirmed similar distribution data.
The findings have sparked discussions regarding stablecoin concentration risks, exchange influence, and the broader intersection between crypto markets and political affiliations.
Concentration Debate: Market Structure or Systemic Risk?
The reported level of USD1 concentration on a single exchange has raised questions within the industry. Some observers argue that such high concentration could introduce structural vulnerabilities, including liquidity dependence on one platform or market imbalance during stress events.
Stablecoins are often associated with decentralization narratives, particularly in relation to transparency, distribution, and risk mitigation. When a large portion of supply is concentrated on a single centralized exchange, critics suggest it may challenge those narratives.
However, others point out that high exchange concentration is not uncommon in the crypto ecosystem, particularly for newly launched tokens or assets supported by major liquidity campaigns.
CZ Pushes Back Against “Overstated” Concerns
Changpeng Zhao (CZ), founder and former CEO of Binance, responded publicly to the centralization concerns, describing them as exaggerated.
In posts shared on X (formerly Twitter), CZ emphasized that Binance has historically held a significant share of various stablecoins due to its scale as one of the largest global exchanges. He noted that across many digital assets, Binance often accounts for 60–70% of exchange-held supply, reflecting user activity rather than proprietary ownership.
Supporters of this perspective argue that the majority of USD1 held on Binance belongs to users, not the exchange itself. From this viewpoint, exchange concentration does not necessarily equate to centralized control over the asset.
Political Links Add Complexity to the Discussion
The situation has attracted additional attention due to WLFI’s reported connections to U.S. President Donald Trump and members of his family.
World Liberty Financial, founded in 2024, lists Donald Trump as an honorary co-founder, alongside Donald Trump Jr., Eric Trump, and Barron Trump. Reports indicate that entities associated with the Trump family hold a notable stake in the company. Public financial disclosures also suggest that President Trump has generated substantial income linked to the project.
While political associations do not directly impact the technical structure of USD1, they have contributed to heightened scrutiny and public debate surrounding governance, transparency, and market influence.
Role of Exchange Promotions
Analysts have also examined Binance’s promotional campaigns related to USD1 and WLFI tokens. In late January, the exchange reportedly launched incentive programs, trading pair expansions, and reward initiatives tied to USD1 holdings.
Such campaigns can significantly increase liquidity and concentration on a specific platform, particularly during early growth phases of a stablecoin. Some market observers suggest that exchange-driven incentives may influence distribution patterns more rapidly than organic market adoption.
However, promotional programs are common industry practices designed to bootstrap liquidity and improve trading depth.
Assessing the Broader Risk Landscape
Independent crypto researcher Molly White noted that while the concentration level is notable, it is not entirely surprising given Binance’s role in supporting USD1’s market growth.
From a systemic perspective, experts generally distinguish between:
Custodial concentration (user assets held on one exchange), and
Issuer-level centralization (control over minting, reserves, and governance).
At present, there is no indication of immediate instability. Nonetheless, discussions around exchange concentration highlight the importance of transparency, reserve backing, and diversified liquidity across platforms.
Conclusion
The debate surrounding Binance and USD1 reflects broader themes within crypto markets: liquidity concentration, exchange influence, and the evolving relationship between digital assets and global politics.
While CZ maintains that concerns are overstated and reflective of Binance’s scale, the situation underscores ongoing conversations about decentralization, market structure, and stablecoin governance.
As the stablecoin sector continues to expand, distribution patterns and transparency standards will likely remain key points of focus for both regulators and market participants.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial or investment advice. Readers should conduct their own research before making any financial decisions.
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