As a seasoned researcher with over two decades of experience in the financial industry, I find myself intrigued by the recent moves made by Donald Trump’s World Liberty Financial (WLFI). The decision to switch from Coinbase-backed cbBTC to WBTC aligns WLFI with Justin Sun, a prominent figure in the blockchain world.
World Liberty Financial (WLFI), a decentralized finance initiative associated with Donald Trump, has recently reorganized its Bitcoin holdings in a swap. Instead of directly-held Bitcoin, WLFI swapped $10.4 million worth of Coinbase-supported cbBTC for approximately 103.15 Wrapped Bitcoins (WBTC). This action comes after Coinbase announced the removal of WBTC from its listings, causing a stir and potential legal disputes among involved parties.
Donald Trump World Liberty Financial Sides with WBTC After Coinbase Controversy
As reported by Lookonchain, there was a trade where Donald Trump World Liberty Financial traded approximately 102.9 million bits of a different cryptocurrency (cbBTC) worth around $10.4 million for about 103.15 WBTC. This transaction took place shortly after Coinbase declared their intent to remove WBTC from their platform due to claims that it did not meet the exchange’s required standards.
By opting for WBTC, World Liberty Financial has linked its operations with Justin Sun, the creator of TRON DAO who is known for his criticisms towards cbBTC. Sun has expressed worries about cbBTC’s management and transparency. This association means that Donald Trump’s project has chosen to move away from Coinbase’s wrapped Bitcoin alternative, preferring instead to work with WBTC’s infrastructure.
The action taken by Coinbase to stop supporting WBTC has led to some heated debates, as people are questioning the reasoning behind their decision. Notably, Justin Sun, founder of TRON DAO, has challenged Coinbase Chief Legal Officer Paul Grewal over the removal of wBTC and the exchange’s token listing criteria. More recently, Sun’s company BiT Global, now in possession of wBTC custodial rights, has filed a lawsuit against Coinbase, claiming they are acting anti-competitively.
BiT Global suit claims Coinbase delisted wBTC to favor its own tokenized Bitcoin product, cBTC. Despite these claims, cbBTC’s market cap has surged to $1 billion, signaling widespread adoption of Coinbase’s wrapped Bitcoin product.
In the meantime, it seems that Donald Trump’s World Liberty Financial has chosen security over novelty by selecting Wrapped Bitcoin (WBTC), a token valued at $13.6 billion in the market. Analysts believe this decision was made due to WBTC’s longer track record and structural benefits compared to Commonly-Backed Bitcoin (cbBTC).
Justin Sun’s Role In Trump’s DeFi Strategy
Just recently, World Liberty Financial received a significant investment of $30 million from Justin Sun, making him their major stakeholder and strategic advisor. This partnership has significantly impacted WLFI’s strategic decisions, such as their decision to switch from using cbBTC to WBTC.
Sun’s critique of cbBTC points out its absence of proof-of-reserve systems and centralized management. His link to BitGo, the guardian of WBTC, strengthens WLFI’s inclination towards the competing wrapped Bitcoin asset as an alternative. This tactical adjustment highlights Trump’s DeFi project’s compatibility with Sun’s blockchain ideology.
Removal of Debt Ceiling In Congress
Additionally, in a conversation with NBC over the phone, Donald Trump advocated for the total elimination of the U.S. debt limit. He characterized this limit as an irrelevant notion and encouraged Congress to scrap it completely.
The President-elect added,
As a crypto investor, if the Democrats are considering eliminating it, I’d be at the forefront advocating against such a move. To me, it may not hold much practical significance, but its psychological impact could be significant.
This plan aligns with the upcoming tenure of Donald Trump’s presidency, during which his government intends to unveil policies aimed at stimulating advancements in blockchain technology and the acceptance of digital assets. Significantly, these legislative goals could influence the regulatory environment for projects such as World Liberty Financial, potentially shaping it according to their specific needs.
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2024-12-19 19:56