The Office of the Comptroller of the Currency granted World Liberty Financial preliminary conditional approval to charter a national trust bank built around its roughly $4 billion USD1 stablecoin, marking the first federal banking license tied to a Trump-linked crypto venture.
The OCC’s conditional approval requires World Liberty Trust Company to maintain at least $20 million in capital, notify regulators of major business-plan revisions, and establish internal audit capabilities before final approval. If the bank clears these conditions, it would handle USD1 issuance and reserve custody directly under federal supervision.
The approved structure does not permit full deposit-taking and lending like a traditional bank and carries no FDIC insurance. Zach Witkoff, co-founder and CEO of World Liberty Financial, said in a statement: “Rigorous oversight, institutional controls and clear accountability are how stablecoins become trusted financial infrastructure. Our ambition is clear: to build the most trusted and widely used digital dollar in the world while strengthening the role of the US dollar across the global economy.”
Concurrent DeFi Leverage Positions
While pursuing the bank charter, World Liberty maintains substantial leveraged positions on Dolomite, a lending protocol, creating a parallel risk structure outside federal oversight.
In April 2026, World Liberty pledged 5 billion WLFI tokens as collateral on Dolomite and borrowed approximately $75 million in stablecoins. The company repaid $15 million on April 9 and an additional $10 million on April 11, leaving $50 million in debt against the collateral position. At the April WLFI price of $0.089, the initial loan-to-value ratio was 16.9%. After repayment at the same token price, the ratio fell to 11.2%.
WLFI has since declined to $0.058, a 35% drop from the April level. At current prices with $50 million debt outstanding, the loan-to-value ratio stands at 17.2%. The Dolomite contract holds approximately 4.998 billion WLFI tokens, valued at roughly $281 million at recent prices.
Liquidation Risk and Pool Strain
One wallet supplied 3 billion WLFI against roughly $41.4 million in USD1 and USDC debt, with a Dolomite health metric at 2.81, indicating significant distance from liquidation. A separate position indexed by DeBank and tied to a multisig shows at least 112.6 million USD1 borrowed against a health rate of just 1.07. Health rates above 1.0 keep a position solvent; a reading near 1.07 typically means collateral value only exceeds debt by a narrow margin. A collateral decline of 6% to 7% would trigger liquidation from that health rate.
In April, World Liberty’s WLFI collateral pledge on Dolomite drained the USD1 lending pool to full utilization, leaving some depositors unable to withdraw normally. More than $40 million of the borrowed funds moved to Coinbase Prime, meaning liquidity did not sit inside Dolomite.
World Liberty said at the time it was nowhere near liquidation and could add more collateral if market conditions worsened. WLFI’s value depends heavily on confidence in World Liberty itself, the same entity doing the borrowing, unlike Bitcoin, Ethereum, or Treasury-backed assets. A falling WLFI price shrinks collateral cushion and raises loan-to-value ratio; forced WLFI selling during liquidation can push price down further.
