Forbes: "Binance holds 87% of WLFI stablecoin USD1 in circulation"

Binance, the world’s largest digital-asset (cryptocurrency) exchange, is reported to hold the bulk of the circulating supply of USD1, a stablecoin issued by World Liberty Financial (WLFI). This is seen as an indicator of the close relationship between Binance and WLFI.

According to Forbes on the 9th (local time), based on data from on-chain analytics platform Arkham, Binance holds about $4.7 billion of the roughly $5.4 billion total USD1 in circulation. That amounts to about 87% of the total circulating supply.

The outlet said this share is unusually high even compared with other stablecoins held by major exchanges. In general, even including customer deposits, large exchanges often account for a much smaller portion of a stablecoin’s circulating supply.

Crypto researcher Molly White noted, "If a particular stablecoin is excessively concentrated on a single exchange, it can create a structural risk in which that exchange can exert influence over the project as a whole." She added, "In particular, it cannot be ruled out that some portion of the 87% of the total supply is not customer assets but holdings directly owned by the exchange."

USD1 is a dollar-pegged stablecoin issued by World Liberty Financial, and its market circulation has been rising rapidly in recent months. However, the fact that its circulation structure is concentrated on a specific exchange is also seen as something that could spark debate in terms of transparency and risk management going forward.

Meanwhile, Binance founder Changpeng Zhao pleaded guilty in 2023 in connection with deficiencies in the operation of an anti-money laundering (AML) program and was sentenced to prison. He was subsequently pardoned by U.S. President Donald Trump last year.