In crypto, distribution tells you more than headlines do.
A stablecoin can claim to be global. It can promise one-to-one backing. It can list on major platforms. But where the tokens actually sit matters more than marketing. And right now, about 87% of the USD1 stablecoin supply sits inside wallets connected to Binance.
That number is not just a statistic. It shapes how the project works, how risk flows, and how power is shared.
USD1 is issued by World Liberty Financial, a venture launched in September 2024 and described as being inspired by Donald J. Trump. The company lists Trump as co-founder emeritus, alongside Donald Trump Jr., Eric Trump, and Barron Trump. An LLC affiliated with Trump and family members reportedly owns around 38% of the company and a large allocation of WLFI governance tokens. Trump has also disclosed income connected to the venture through the Donald J. Trump Revocable Trust.
USD1 itself is straightforward on paper. Announced in March 2025, it is designed to be redeemable one-to-one with U.S. dollars. Like USDT or USDC, it is backed by dollars and U.S. government money market assets. The model is familiar: users hold the token; the issuer invests the reserves; the issuer keeps the interest.
WLFI is different. It is a governance token sold to accredited and foreign investors. It does not represent company ownership and is not backed by assets. Instead, it gives holders voting rights over project decisions. It was initially non-transferable before partial unlocking.
So where does Binance enter the story?
Binance currently holds roughly $4.7 billion of the $5.4 billion total USD1 supply, according to blockchain analysis cited by Forbes. That equals about 87% of all tokens in circulation. Binance’s U.S. affiliate holds a negligible amount, as Binance cannot serve U.S. customers under its 2023 settlement terms. That suggests most of the activity is offshore.
This level of concentration is unusual among top stablecoins.
To understand how it happened, you have to follow incentives.
First, promotions. In late January, Binance announced that USD1 holders would receive $40 million worth of WLFI governance tokens. Shortly after, World Liberty Financial transferred approximately $40 million in WLFI tokens to Binance to fund the campaign. Binance users were effectively rewarded for holding USD1 on the exchange.
If you run an exchange and want liquidity to stay inside your ecosystem, this is how you do it. Offer rewards. Increase yield. Make holding more attractive than moving.
Second, institutional flow. In May 2025, MGX, an Abu Dhabi state-backed technology fund chaired by Sheikh Tahnoon bin Zayed Al Nahyan, used $2 billion worth of USD1 to invest in Binance. That single move placed a significant share of USD1 supply under Binance custody almost overnight.
It was not retail momentum. It was capital allocation at scale.
Third, structural integration. In December, Binance converted assets backing its sunsetting BUSD stablecoin into USD1. The announcement described this as embedding USD1 into Binance’s updated collateral structure. In practical terms, USD1 became more than a listed asset. It became part of the platform’s internal plumbing.
Promotions brought users. The MGX deal brought scale. The BUSD conversion brought infrastructure alignment.
That is how you arrive at 87%.
Critics have raised concerns, not only about concentration but about timing and optics. Binance founder Changpeng Zhao, known as CZ, was sentenced in 2024 for violations of U.S. anti-money laundering regulations. Binance paid over $4 billion in fines. In October 2025, Trump pardoned CZ. Following that pardon, Binance expanded USD1-related promotions, including incentives on Binance.US.
Zhao later announced a $1.8 billion donation aimed at supporting crypto adoption initiatives under the Trump administration. Meanwhile, the Securities and Exchange Commission dropped its lawsuit against Binance in May 2025, shortly after USD1 was listed.
Both Binance and World Liberty Financial deny any improper relationship. Representatives have described the listing as standard business practice, similar to a brand gaining shelf space in a major retail store.
From a structural perspective, the core question is not political. It is mechanical.
What happens when most of a stablecoin lives on one exchange?
Imagine a grocery store that carries 87% of all the milk produced by one dairy company. If that store has an operational issue, the milk is still technically there. But customers cannot access it.
In crypto, access is everything.
Independent researcher Molly White described the concentration as unusual, though not surprising given the scale of promotions. She noted that heavy concentration at a single exchange creates theoretical risks. Tokens could become temporarily locked during bankruptcy proceedings, legal disputes, or technical failures.
Even if reserves remain intact, access could be delayed.
There is also leverage. When one exchange holds most of a stablecoin’s supply, it gains influence. Some of that supply likely represents customer balances. Some may represent assets the exchange controls directly. Either way, liquidity, listing decisions, and operational integration give the exchange negotiating power.
Corey Frayer, a former senior adviser on crypto markets to the SEC chair, suggested the concentration indicates USD1 may not have been designed as a typical decentralized stablecoin. Others disagree and argue that concentration reflects early-stage growth strategy rather than long-term design.
The truth may sit somewhere in between.
From a business standpoint, concentrating liquidity can accelerate adoption. Deep liquidity on one platform improves trading efficiency. Promotions drive awareness. Institutional placements boost market cap quickly. For a new stablecoin, speed matters.
But speed has trade-offs.
Stablecoins are often valued for neutrality and portability. USDT and USDC circulate across many exchanges, wallets, and DeFi protocols. Their supply is not dominated by a single custodian. That distribution spreads operational risk.
USD1, at least for now, is different.
There is another layer. Stablecoin issuers typically invest backing reserves in short-term Treasuries and money markets, earning interest. With billions under management and yields around 3.6% annually, reserve income can be significant. The larger the supply, the larger the interest stream.
If supply is concentrated and closely integrated with a single exchange, revenue alignment becomes more intertwined. That does not automatically create problems. But it does tighten the ecosystem.
Add to that the reported January 2025 deal in which Eric Trump signed an agreement to sell 49% of World Liberty Financial to associates of Sheikh Tahnoon for $500 million. Tahnoon chairs MGX, the same fund that invested $2 billion in Binance using USD1. Rep. Ro Khanna has launched an inquiry into whether the arrangement influenced U.S. policy decisions.
Again, the companies involved deny wrongdoing.
Still, perception shapes markets. In crypto, trust is part of the product.
So what should observers watch next?
One key signal is post-promotion behavior. The $40 million WLFI campaign ends February 20. If users withdraw USD1 from Binance afterward, concentration could fall. If they keep it there, the structure may solidify.
Another signal is transparency. Regular reserve disclosures and third-party attestations can strengthen confidence. Clear reporting on governance token allocations also matters.
And then there is diversification. Listings on additional exchanges, deeper DeFi integrations, and broader custody distribution would reduce single-point risk.
For now, Binance’s 87% control of USD1 supply represents a rare case study in how quickly stablecoin distribution can centralize when incentives align. It did not happen by accident. It followed promotions, capital deals, and infrastructure decisions.
Whether that concentration remains temporary or becomes permanent will shape USD1’s future.
In crypto, design is not only about code. It is about incentives, custody, and access.
Right now, USD1’s design tells a clear story. Growth came fast. Liquidity sits in one place. The next chapter depends on whether that liquidity spreads out or stays put.
