World Liberty Financial Co-Founder Zach Witkoff Responds to External Doubts
Zach Witkoff stated that USD1 actively accepts OCC supervision.
World Liberty Financial co-founder Zach Witkoff responded to external doubts, stating that the company's application for an OCC national trust bank charter is aimed at accepting more continuous and stringent federal regulation, rather than evading it.
The Office of the Comptroller of the Currency (OCC) has granted preliminary conditional approval to World Liberty Trust Company. This trust bank plans to place the issuance, custody, and reserve management of USD1 under direct OCC supervision, but cannot officially operate until meeting pre-opening conditions.
Witkoff stated that the OCC charter means ongoing supervision, regular reviews, capital and liquidity requirements, Bank Secrecy Act anti-money laundering and sanctions controls, internal audits, operational risk standards, and federal enforcement authority; these regulatory obligations will not automatically disappear with the end of the current administration.
The OCC approval letter requires World Liberty Trust to maintain at least $20 million in Tier 1 capital, of which at least $10 million or half of Tier 1 capital (whichever is higher) must be kept as qualifying liquid assets; the institution must also maintain a liquidity reserve for 180 days of operating expenses.
The application was submitted in January of this year, and after review by professional regulators, the OCC granted conditional approval. The proposed trust bank will be headquartered in Bay Harbor Islands, Florida, with business including the issuance and management of USD1, reserve management, and digital asset custody.
Witkoff stated that USD1 is the second-largest stablecoin by market capitalization and trading volume that meets GENIUS Act standards; however, this claim is a statement from company executives, and market share, compliance qualifications, and the definition of "second largest" should still be verified based on stablecoin issuance volume, trading data, and applicable laws.
In terms of market mechanisms, World Liberty attempts to integrate the issuance, redemption, reserves, and custody of stablecoins into a single legal entity regulated by the OCC. Buyers are trading platforms, market makers, institutions, and cross-border payment users that require on-chain settlement in USD and redeemable reserve guarantees; sellers provide financial infrastructure for short-term U.S. Treasury bonds, cash custody, auditing, compliance, blockchain settlement, and liquidity. If the license is ultimately granted, USD1 could enhance institutional access capabilities due to federal oversight; however, capital, liquidity, review, and sanction compliance will increase operational costs and subject reserve assets, redemption mechanisms, and related transactions to higher transparency pressures.
Source: Public Information
ABAB AI Insight
World Liberty Financial launched USD1 in a cryptocurrency project involving the Trump family and applied for a national trust bank charter in January 2026. This path differs from traditional offshore stablecoin issuers: instead of merely placing reserves in bank accounts and completing issuance through external partners, it attempts to consolidate issuance, custody, reserve management, and redemption responsibilities under a nationally chartered trust bank subject to OCC scrutiny. The OCC's preliminary conditional approval is not a formal operating license; World Liberty must still meet capital, liquidity, governance, risk management, and other opening conditions.
The key to the capital path is control over reserve assets. Stablecoin issuers begin by exchanging tokens for dollars from users, acquiring investable cash reserves; if reserves are allocated to cash, short-term U.S. Treasury bonds, or money market instruments, interest income becomes a significant profit pool for the issuer. A national trust bank charter can centralize reserve management, asset custody, redemption operations, and compliance disclosures, reducing reliance on external partners while making the OCC a core node for ongoing scrutiny of balance sheets, liquidity, and operational control.
A historical comparison is the institutional paths of Circle and Paxos. Paxos obtained a New York state trust company charter early on and provided issuance infrastructure for PayPal USD; Circle received final OCC approval for its national trust bank in July 2026 to conduct USDC reserve management and custody under federal regulation. The difference for World Liberty is that its political connections have made the license approval a public controversy, but from a business structure perspective, all three are competing for the entry point into the stablecoin industry of "compliant issuer - reserve income - institutional distribution."
Essentially, it is about capital concentration. Stablecoins are not just a payment product; they are a mechanism for aggregating global users' dollar balances into a large-scale portfolio of short-term safe assets. Issuers with federal regulatory licenses find it easier to access banks, institutional custody, payment networks, and corporate clients, but they also have greater capacity to accumulate reserve scale and interest income; regulation does not eliminate concentration but pushes issuance rights further toward a few institutions that can bear fixed compliance costs through capital, auditing, liquidity, and ongoing scrutiny thresholds.
ABAB News · Cognitive Law
The profit of stablecoins lies not in tokens but in reserves.
Licenses are not a moat; ongoing scrutiny is.
Regulation increases trust but also increases concentration.