Revenue from USD1 Stablecoin Reserves May Back World Liberty's Token Buyback

World Liberty, the firm backed by Donald Trump, rolled out a buyback for its WLFI governance token on Thursday. The buyback may initially be funded by income from the reserves that back the firm's USD1 stablecoin.

WLFI's price has fallen roughly 10% since the US midterms and over 60% this year, according to Reuters. Support for holders now relies on funds that could partly come from stablecoin reserve income.

What the Buyback Suggests About USD1

The firm described the buyback as a tool for boosting governance participation, giving long-term holders a larger say in votes. Reuters noted that World Liberty plans to integrate buybacks as a permanent element of its strategy.

World Liberty Financial initiates its WLFI token buyback program.

Since the program focuses on long-term holders, it could also pull governance influence away from short-term traders.

Initial buyback funds could come from revenue on the reserves supporting USD1, the firm's dollar-linked stablecoin, as well as other unspecified sources. No details on the exact split were provided in the Reuters report.

If reserve income forms the bulk of the funding, the adoption of USD1 would indirectly determine WLFI's price support. More income from larger reserves would fuel more purchases.

However, this assessment becomes less compelling if other sources handle most of the allocation.

The venture was founded in 2024 by Donald Trump, his three sons, and other partners, according to Reuters. The family holds a 38% stake in World Liberty and generates income from trading or utilizing WLFI and USD1.

Can a Self-Funded Buyback Measure Real Market Demand?

A buyback paid for by the issuer's revenue cannot demonstrate independent demand. The real test will be WLFI's price performance after the program's buying pressure eases.

Because stablecoin issuers make money on reserve assets, a similar self-funding loop could be adopted by other issuers who have native tokens.

Two meme coins linked to Trump — Official Trump (TRUMP) and Melania Meme (MELANIA) — also dropped to all-time lows after the Democrats secured Congress.

Justin Sun, the founder of Tron, has petitioned a US federal court to sanction World Liberty over the freezing of his WLFI tokens. World Liberty maintains the freeze was a standard security measure.

According to BeInCrypto, Democrats will chair key oversight committees from January, and World Liberty is anticipated to be the initial focus of scrutiny.

Should reserve-funded buybacks become common practice, the prices of tokens associated with the issuer might follow stablecoin growth rates just as much as they follow market mood.