The Trump Family's Crypto Bank Dream: A New Experiment in Power and Capital

Author: Nikka, WolfDAO

1. Banking License: Precise Calculation of Perpetual Privileges

The Trump family chose to apply for a national trust bank license rather than issuing Meme coins or endorsing NFT projects. Behind this choice lies a profound power logic. Meme coins are a one-time attention monetization, and stablecoin companies are just ordinary commercial entities. But a national trust bank is not merely a participant in the financial system; it is part of the system itself.

Once approved by the OCC, WLTC will have the right to directly access the national payment system, and most critically — a scarce license to provide crypto asset custody services for institutional clients. Custody services are a rigid requirement for traditional financial institutions entering the crypto world, but so far, the OCC has only approved a few pure crypto banks like Anchorage Digital. This is a highly scarce, demand-rich market with extremely high regulatory barriers.

The deeper value lies in the license’s permanence and transferability. Political influence may fade after a change of office, but a federal bank license is a permanent institutional asset — it can be transferred, used as collateral for financing, and continuously generate rental income. The application by the Trump family is not for a project but for a tradable financial franchise.

The timing is equally precise. The partial passage of the 2025 GENIUS Act and CLARITY Act provides legal basis for stablecoins and custody services. This legislation itself carries a strong political background — a regulatory-friendly environment obtained through donations of tens of millions to hundreds of millions of dollars from the crypto industry to the Trump camp. But legislation is just the door opener; the real competition is who can pass fastest. While Circle and Ripple are stronger, they lack what WLFI possesses: a direct channel of political influence.

Within this framework, the role of USD1 becomes clear — it is not the goal but a tool to obtain the license. The $3.3 billion market cap was built on Binance’s 20% annual yield and WLFI’s treasury subsidies. The existence of USD1 only needs to prove that WLFI has operational experience and cooperation channels; superficial data is enough to meet “business feasibility” requirements. Once the license is obtained, whether USD1 continues to exist is no longer critical — WLTC can provide custody for any stablecoin and collect “toll fees” across the entire crypto financial system.

2. The Perfect Closed Loop of Power Rent-Seeking

To understand the essence of WLFI, one must return to the political donation surge of 2025. The crypto industry injected tens of millions to hundreds of millions of dollars into the Trump camp: Crypto.com’s parent company $20 million, Gemini, Blockchain, a16z founders several million dollars. These donations bought a policy environment favorable to all crypto enterprises — a typical public good.

But the Trump family not only enjoyed this public good but also gained private benefits through WLFI: a 75% profit share, earning billions of dollars. This created a perfect利益闭环: using industry funds to buy policy tilt, supporting their own enterprises through policy, and using enterprise profits to influence policy further. Traditional political donations at least have a layer of separation between donors and beneficiaries, but WLFI’s model is “industry donations → family profits,” with policymakers also being direct beneficiaries.

More ingeniously, this model is formally legal. The Trump family profits by operating a “market-oriented” enterprise — with products, business, and clients. But in reality, the core competitiveness of this enterprise is not technology or products but political relationships and regulatory privileges.

OCC’s discretionary power is precisely where power rent-seeking occurs. Bank license applications are not binary decisions of approval/rejection but complex processes involving countless discretionary points. What capital structure is “sufficient”? What management experience is “qualified”? Each discretionary point offers space for political influence. WLFI does not need OCC to violate rules; it only needs to make “friendly” judgments at numerous discretion points — slightly looser standards here, slightly more flexible interpretations there. Each individual judgment may seem reasonable, but combined, they can create significant differences.

3. The Reshaping of Competition in the Crypto Industry

WLFI’s bank application essentially competes for a huge but participation-scarce market — institutional crypto custody services. Currently, global institutional demand for crypto asset custody is conservatively estimated at over $100 billion, but institutions with compliant custody qualifications are few. OCC has only approved a handful like Anchorage Digital; Coinbase, Gemini, though offering custody services, do not hold federal bank status.

If WLTC is approved, the most direct impact will be a redivision of this blue ocean market. Traditional financial institutions — pension funds, sovereign wealth funds, family offices — when seeking crypto asset allocations, prioritize custody security and compliance over yield. A custody institution with a federal bank license, directly regulated by the OCC, is highly attractive to these clients. This means companies like Circle and Coinbase, already queued for licenses, may watch helplessly as WLFI leverages political advantages to jump the queue and seize the first-mover advantage.

From the perspective of stablecoin competition, the approval of WLTC will break the duopoly of USDT and USDC. Although USD1’s current market cap is only $3.3 billion, the institutional regulatory benefits of a bank license could enable rapid expansion in the institutional market. The key is that WLTC can offer “one-stop service” — issuance, custody, and exchange all internalized, no longer relying on third parties. For institutional clients, this means less counterparty risk, simplified compliance, and lower operational costs. Tether and Circle must provide similar services through multiple partner banks and custodians, whereas WLTC, as a federal bank, can do it independently. This efficiency advantage is structural.

The most pragmatic observation is that WLFI is pioneering a new business path: not through technological innovation or market competition, but through political resources and regulatory rent-seeking to establish barriers to entry. The success of this path will attract more capital and entrepreneurs to imitate, forming a new business ecosystem centered on licenses and protected by political relationships. In this ecosystem, the rule-makers and the biggest beneficiaries may be the same group, and genuine market competition will give way to power distribution and利益交换.

Conclusion

The most profound insight from this case is not about cryptocurrency itself but about power. It reveals how, in the digital age, the integration of power and capital can achieve seamless connection. Traditional political-business revolving doors at least have a time lag, but the WLFI model is synchronized in real-time: policymaking while operating enterprises, pushing regulation while applying for licenses. This increased efficiency also multiplies the risks of corruption.