The OCC’s conditional approval would bring World Liberty’s $4 billion USD1 stablecoin under federal supervision.
The Office of the Comptroller of the Currency (OCC) gave World Liberty Financial, a DeFi venture associated with President Donald Trump, preliminary conditional approval to charter a national trust bank built around its roughly $4 billion USD1 stablecoin.
World Liberty Trust Company would eventually handle USD1 issuance and reserve custody directly, moving both under federal supervision if the bank clears the conditions still standing between it and final approval.
The company borrowed about $75 million in stablecoins against that collateral, and the borrowing drained the USD1 lending pool to full utilization, leaving some depositors unable to withdraw normally.
A falling WLFI price shrinks the collateral cushion and raises the loan-to-value ratio. If the position approaches liquidation, forced WLFI selling can push the token's price down further, shrinking the cushion again.
Adding fresh WLFI collateral can push the liquidation line farther away without changing that underlying dependence on the token's own market depth
The bear case is already partly visible on-chain today. The World Liberty multisig's Dolomite position sits at a 1.07 health rate, close enough to liquidation that a modest further slide in WLFI could put it at risk.
Under that version, the $25 million repayment addressed only part of the exposure, and the same liquidation dynamics from April are live again, this time on a specific, identifiable wallet.
A federal charter can move how USD1 gets issued and supervised into Washington, while the leveraged WLFI structure sitting elsewhere in World Liberty's business looks insulated in one wallet and one modest decline away from trouble in another.