World Liberty pushes USD1 into US onchain lending with World Liberty Markets

World Liberty Financial debuted an onchain lending protocol that centers its dollar-linked stablecoin as the principal settlement and borrowing asset, signaling a deliberate step from payments and liquidity provision toward credit markets. The protocol, launched in mid-January 2026, allows depositors to earn yield and lets borrowers collateralize volatile tokens to obtain USD1 without selling their holdings. Asset support spans major crypto native collateral — Ether and tokenized Bitcoin — alongside established stablecoins and USD1 itself, with public plans to integrate tokenized real-world assets later. Rather than manual underwriting, the system encodes lending rules, collateral thresholds and automatic liquidation logic into smart contracts, making key risk parameters auditable onchain. That design trades counterparty opacity for deterministic processes, but it also makes users dependent on code safety and market-liquidity conditions; rapid price swings remain capable of triggering fast-fire liquidations. The USD1 supply has expanded to around $3.4 billion, which the project positions as more than a trading medium: it becomes the plumbing for decentralized credit flows. At the same time, World Liberty is pursuing regulatory credibility through an application for a national trust bank charter, a move that could create a hybrid pathway between regulated custody/issuance and permissionless lending. Institutional participants may find the combination of transparent smart-contract mechanics and a regulated issuer attractive, yet significant open questions remain about reserve transparency, legal enforceability of tokenized real-world assets and cross-border compliance. The launch also underscores a broader industry shift: lessons from centralized lender failures are pushing capital toward onchain protocols that emphasize explicit collateralization and visible liquidation rules. Nevertheless, the model currently serves holders seeking liquidity efficiency rather than newcomers lacking collateral; overcollateralization constrains true financial inclusion. If the platform expands into RWAs and secures clearer regulatory backing, it could broaden onchain credit utility for corporate treasuries and institutional desks, but that path hinges on robust audits, reserve assurances and legal frameworks. In short, World Liberty’s entry accelerates the normalization of stablecoin-centric credit on public ledgers while exposing the usual trade-offs between automation, software risk and regulatory uncertainty.