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Make Binance top of the social media headlines for many reasons. Among them, a Forbes report revealed that the exchange and its users control most of the USD1, a stablecoin issued by World Liberty Financial (WLFI).
The WLFI-affiliated project was linked to US President Donald Trump and his family, sparking debate about concentration risks, the influence of exchanges, and the growing intersection between cryptocurrency brands and politics.
Binance’s USD1 Dominance Renew the Debate on Stablecoin Centralization
A February 9 investigation by Forbes found that Binance owns about 87% of the circulating supply of USD1 coin – about $4.7 billion out of about $5.4 billion total.
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male Report This represents the highest concentration on a single platform ever recorded among major stablecoins. Blockchain analytics data from Arkham Intelligence confirmed these numbers.
The findings have ignited debates about whether a high level of concentration could create systemic risks or undermine the narrative of decentralization often associated with stablecoins.
Chow refutes the narrative of centralization
Reply Changping Zhao (CZ), Founder and former CEO of Binanceresponded publicly to the controversy, and considered the concerns to be exaggerated. In posts on X (Twitter), CZ explained that Binance typically holds large stakes in multiple stablecoins simply because Its size as the largest bag.
CZ said that Binance users own the largest percentage of most stablecoins (such as USDT, USDC, USD1, U… you name it) compared to all other centralized cryptocurrency exchanges, and argued that this is nothing new. books CZ.
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The Binance executive also explained that when measuring central exchange investments in general, Binance typically represents around 60-70% in multiple assets.
Supporters echoed this opinion, Confirmed Most of the assets belong to customers rather than the exchange itself, and a high concentration in a dominant trading platform is not unusual in digital currency markets.
Political connections add more controversy
Controversy has increased due to the association of USD1 with… World Liberty Financial. Founded in 2024, WLFI lists Trump as one of its honorary founders alongside Donald Trump Jr., Eric Trump and Barron Trump.
An entity linked to Trump had a significant stake in the company, and financial disclosures revealed that Trump received tens of millions of dollars from the firm.
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The Forbes report also noted that the promotions linked to the USD1 have contributed to this concentration. At the end of January, Binance hosted Campaigns and incentives Linked to WLFI coins, including a dividend intended to reward holders of 1 USD. Such promotions can quickly increase liquidity on a single platform, especially if accompanied by new trading pairs and marketing efforts.
These developments have led some analysts to question whether exchange incentives are able to shape the distribution of stablecoins more than organic market demand.
Public opinion holds that a strong concentration in a single stock exchange presents theoretical risks even if the immediate threats to stability are limited.
These risks may include counterparty exposure to extreme circumstances or potential for exchanges to exert influence on liquidity and market structure.
Independent cryptocurrency researcher Molly White described this concentration as unusual, although not entirely surprising given Binance’s role in promoting USD1.
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She noted that a high concentration can create… Dynamic leverage It raises questions about the transparency of ownership in the large balances held by stock exchanges.
Others were more critical. Former SEC counsel Corey Fryer argued that the structure and distribution of USD1 raises broader concerns about the purpose and governance of the stablecoin, as well as the identity of the main holders behind the large balances on the exchanges.
USD1 was not intended to be a true stablecoin, Forbes said, citing Fryer
Binance World and Liberty Financial however deny that this concentration indicates undue control or influence
Binance has described its involvement as limited to regular listing services, infrastructure and market access. At the same time, WLFI representatives described the listing of coins on platforms as a natural distribution channel
However, this event has reignited a deep debate in the industry: can stablecoins serve as a truly neutral financial structure when liquidity and user activity are heavily concentrated in centralized platforms?
