Senior Democratic lawmaker Sen. Elizabeth Warren (D-Mass.) called President Donald Trump-backed stablecoin a potential threat to national security and a conduit for corruption on Tuesday.

What Happened: Warren, a known cryptocurrency critic, took to X to express her concerns about the dollar-pegged cryptocurrency USD1, currently available on Ethereum ETH/USD and BNB Chain BNB/USD.

“Trump's stablecoin is shady and a national security risk,” she said. “He's cashing in on foreign crypto deals—and weakening guardrails that protect our advanced technology.”

Warren urged the Senate not to enable this “corruption” by passing the GENIUS Act, popularly known as the stablecoin bill, without necessary amendments.

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Interestingly, Warren’s post included a link to an Axios report revealing that Senate Democrats, including herself, had asked Trump to divest from the stablecoin before his Middle East trip.

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The White House didn’t immediately return Benzinga’s request for comment.

Why It Matters: Warren’s criticism aligns with the stance of a group of Senate Democrats who recently withdrew their support for a Republican-led stablecoin legislation, citing concerns about a foreign deal involving the Trump family-backed USD1.

USD1, which has risen to become the fifth-largest stablecoin by capitalization, has been chosen to close a $2 billion deal between Abu Dhabi investment firm MGX and cryptocurrency exchange Binance, as announced by Eric Trump at a recent cryptocurrency conference.

A Trump-affiliated organization holds a 60% share in the parent company of the firm behind the stablecoin, World Liberty Financial, while his son Eric Trump sits on the board.

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Photo Courtesy: Kirill Aleksandrovich On Shutterstock