Author: Nikka, WolfDAO
I. Banking License: The Precise Calculation of a Perpetual Franchise
The Trump family's choice to apply for a National Trust Bank license, rather than issuing Memecoin or endorsing NFT projects, reflects a profound power dynamic. Memecoin is a one-time monetization of attention, and stablecoin companies are simply ordinary business entities. However, the National Trust Bank is not a participant in the financial system, but rather an integral part of it.
Once approved by the OCC, WLTC will have the right to direct access to the national payment system, and most importantly, a scarce license to provide crypto asset custody services to institutional clients. Custody services are a necessity for traditional financial institutions entering the crypto world, but the OCC has so far only approved a few pure crypto banks such as Anchorage Digital. This is a highly scarce market with strong demand and extremely high regulatory barriers.
The deeper value lies in the permanence and transferability of the license. Political influence fades upon leaving office, but a federal banking license is a permanent institutional asset—it can be transferred, used as collateral for financing, and continuously generate rental income. The Trump family applied for not a project, but a financial franchise that can be passed down through generations.
The timing was equally precise. The partial passage of the GENIUS Act and CLARITY Act in 2025 provided a legal basis for stablecoins and custody services. This legislation itself carried a strong political background—a regulatory-friendly environment obtained in exchange for tens to hundreds of millions of dollars donated by the crypto industry to the Trump campaign. But legislation only opens the door; the real competition lies in who can pass it the fastest. While Circle and Ripple are stronger, they lack what WLFI possesses: direct channels of political influence.
Within this framework, USD1's role becomes clear—it's not the goal, but a tool for obtaining the license. The $3.3 billion market capitalization was built on Binance's 20% annualized return and WLFI's treasury subsidies. USD1's existence only needs to prove WLFI has operational experience and partnership channels; the surface data is sufficient to meet the "business viability" requirement. Once the license is obtained, whether USD1 continues to exist is no longer crucial—WLTC can provide custody for any stablecoin, collecting "tolls" throughout the entire crypto-financial system.
II. The Perfect Closed Loop of Rent-Seeking
To understand the essence of WLFI, we must return to the political donation wave of 2025. The crypto industry poured tens to hundreds of millions of dollars into the Trump campaign: Crypto.com's parent company donated $20 million, and the founders of Gemini, Blockchain , and a16z donated millions of dollars. These donations resulted in a policy environment favorable to all crypto companies—a typical public good.
But the Trump family not only enjoys this public good, but also gains private benefits through WLFI: a 75% profit share, amounting to billions of dollars. This creates a perfect closed loop of interests: using industry funds to buy policy favors, using policy favors to support their own businesses, and using corporate profits to continue influencing policy. Traditional political donations at least have a layer of separation between donors and beneficiaries, but the WLFI model is "industry donations → family profits," with policymakers being the direct beneficiaries.
What's even more ingenious is that this model is entirely legal in form. The Trump family profits by running a "market-oriented" business—with products, operations, and customers. But in reality, the core competitiveness of this business is not technology or products, but political connections and privileged access to regulatory approvals.
The OCC's discretionary power is precisely where rent-seeking arises. Bank license applications are not a simple binary decision of approval or rejection, but a complex process involving countless points of discretion. What kind of capital structure is "adequate"? What kind of management experience is "qualified"? Each point of discretion provides room for political influence. The WLFI doesn't need the OCC to violate the rules; it only needs to make "friendly" judgments at countless points of discretion—sometimes the requirements are slightly more lenient, sometimes the standards are interpreted more flexibly. Each individual judgment may seem reasonable, but when accumulated, they can create significant differences.
III. Restructuring of Competition in the Crypto Industry
WLFI's application to become a bank is essentially a bid for a huge but scarce market – institutional-grade crypto custody services. Currently, the global institutional demand for crypto asset custody is conservatively estimated at over $100 billion, but only a handful of institutions possess compliant custody qualifications. The OCC has only approved a few, such as Anchorage Digital, while Coinbase and Gemini, although providing custody services, do not have federal bank status.
If WLTC is approved, the most direct impact will be a reshaping of this blue ocean market. Traditional financial institutions—pension funds, sovereign wealth funds, and family offices—when seeking crypto asset allocation, prioritize custody security and compliance over yield. A custodian institution with a federal banking license and direct regulation by the OCC will be fatally attractive to these institutional clients. This means that companies like Circle and Coinbase, already in the queue for licenses, may have to watch WLFI jump the queue due to its political advantage and seize a first-mover advantage.
From the perspective of the stablecoin competitive landscape, the approval of WLTC will break the duopoly of USDT and USDC. Although USD1 currently has a market capitalization of only $3.3 billion, the regulatory benefits brought by the banking license may enable it to expand rapidly in the institutional market. Crucially, WLTC can provide a "one-stop service"—issuance, custody, and exchange are all internalized, no longer relying on third parties. For institutional clients, this means less counterparty risk, simpler compliance processes, and lower operating costs. Tether and Circle must provide similar services through multiple partner banks and custodians, while WLTC, as the Commonwealth Bank, can do so independently; this efficiency advantage is structural.
The most pragmatic observation is that WLFI is pioneering a new business path: building competitive barriers not through technological innovation or market competition, but through political resources and regulatory arbitrage. The success of this path will attract more capital and entrepreneurs to follow suit, forming a new business ecosystem centered on licenses and protected by political connections. In this ecosystem, the rule-makers and the biggest beneficiaries may be the same group of people, while genuine market competition gives way to power distribution and the exchange of benefits.
Conclusion
The most profound lesson from this case isn't about cryptocurrency, but about power itself. It reveals the extent to which power and capital can seamlessly merge in the digital age. Traditional political-business revolving doors at least have a time lag, but the WLFI model is real-time and synchronous: policymaking and business operations are happening simultaneously, regulatory pushes and license applications are being pursued concurrently. This increased efficiency also exponentially increases the risk of corruption.
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