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World Liberty Financial Offloads Bitcoin to Pay Debt

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WLFI Token - CoinGecko

The Trump family’s DeFi protocol was forced to sell $5 million of BTC today to cover an Aave loan.

World Liberty Financial (WLFI), the decentralized finance (DeFi) protocol affiliated with President Trump’s sons, was forced to sell some Bitcoin at roughly $67,000 today to avoid liquidation on Aave.

According to Arkham Intelligence, the WLFI wallet was forced to liquidate more than 170 BTC, worth roughly $11 million, to repay its loans on Aave.

Meanwhile, the WLFI token is down 14% today, slightly underperforming BTC and ETH, which are both down 13%.

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WLFI Token - CoinGecko
WLFI Token – CoinGecko

WLFI has been in a consistent downtrend since its token launch in September. The token started trading on Sept. 1 at $0.23, or a $6.6 billion market capitalization, and now trades 65% lower at $0.115.

In addition to the protocol’s financial woes, Trump’s political opponents continue to call for probes and investigations into the DeFi protocol.

Today, U.S. Representative Ro Khanna announced that he has launched an investigation into a $500 million investment in WLFI from the United Arab Emirates. Back in November, Senators Elizabeth Warren and Jack Reed claimed that the protocol is tied to malicious actors from North Korea and Russia; however, it remains unclear if there has been any progress on this probe.

Warren, in particular, is no fan of cryptocurrency, broadly referring to DeFi users as “scammers” and labeling the GENIUS bill as a “grift.”

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Crypto World

Stablecoins Do Not Threaten Banking Just Yet: Analyst

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Stablecoins Do Not Threaten Banking Just Yet: Analyst

The impact of stablecoins on the banking sector appears “limited” at the current phase of the adoption cycle, but banks could face increasing competition and an erosion of market share as the stablecoin sector and tokenized real-world assets (RWAs) grow in market capitalization. 

“So far, the use of stablecoins remains limited, but their market capitalization exceeded $300 billion at the end of last year,” Abhi Srivastava, associate vice president of Moody’s Investors Service Digital Economy Group, told Cointelegraph.

The stablecoin market cap has surged past $300 billion. Source: RWA.xyz

The role of stablecoins in payments, cross-border commerce and onchain finance is “expanding,” despite their currently limited role, Srivastava said, adding that existing payment systems in the US are already “fast, low-cost and trusted.” He said:

“For the banking sector, at this stage, disruption risk appears limited. In the near term, US rules that prohibit stablecoins from paying yield mean they are unlikely to replace traditional deposits at scale domestically.”

However, over time, growing adoption of stablecoins and tokenized RWAs, traditional or physical financial assets represented on a blockchain by a token, could place “pressure” on the banking sector, leading to deposit outflows and reduced lending capacity, he said.

Stablecoin regulatory policy has become a hot-button issue among crypto industry executives and those in the banking sector, with fears that yield-bearing stablecoins could erode banking market share proving to be a stumbling block for the CLARITY crypto market structure bill in Congress. 

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Related: Stablecoins behave like FX markets as liquidity splits: Eco CEO

CLARITY Act stalled, as banks fight yield-bearing stablecoins

The Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act, is a comprehensive crypto market regulatory framework that establishes an asset taxonomy, regulatory jurisdiction and oversight over the crypto markets.

The CLARITY crypto market structure bill. Source: US Congress

It is now stalled in Congress after a group of crypto industry companies, led by cryptocurrency exchange Coinbase, publicly stated opposition to earlier drafts of the bill.

A lack of legal protections for open-source software developers and a prohibition on yield-bearing stablecoins were among some of the most contentious issues cited by crypto industry opponents of the legislation.

Several attempts have been made by US lawmakers and the White House to negotiate a bill acceptable to both the crypto industry and the bank lobby.

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Earlier this month, North Carolina Senator Thom Tillis said he plans to release an updated draft bill proposal that would be acceptable to both sides; however, the bill has reportedly received pushback, according to Politico, and has yet to be publicly released. 

However, other crypto industry executives and market analysts have warned that if the CLARITY Act fails to pass, it could open the crypto industry up to future regulatory crackdowns by hostile lawmakers and officials.

Magazine: Stablecoins will see explosive growth in 2025 as world embraces asset class