Trump's USD1 stablecoin is off to a rocky start, data shows

President Donald Trump's new dollar-pegged stablecoin is off to a sluggish start, with muted inflows and little organic demand, new data shows.

The USD1 token — launched by Trump's decentralized finance firm, World Liberty Financial — has so far failed to break out of a narrow speculative niche, according to Kaiko analyst Adam Morgan McCarthy.

"Trump is trying to launch this stablecoin in a massive, growing market that's a quarter of a billion dollars in size already, and his token's only really been successful so far on a niche market of a niche market," McCarthy said. "It hasn't managed to make the leap from decentralized staging platforms like PancakeSwap into centralized venues that serve the mass market."

The U.S. dollar-backed USD1 saw a burst of activity on PancakeSwap, a decentralized exchange built on Binance's smart chain, with average daily on-chain volumes topping $14 million following its listing on Binance May 22, according to new research from Kaiko. Volume on Binance itself has lagged at $8 million.

The coin's limited reach is compounded by a lack of real users.

Kaiko's data confirms that more than half of USD1's liquidity on PancakeSwap comes from just three wallets — a level of concentration that raises questions about where actual demand is coming from.

"These were the market making wallets, so they're probably tied to USD1 and the World Liberty Financial team, so not actually an organic volume," added McCarthy.

Donald Trump Jr. told CNBC's "Squawk Box" Tuesday that USD1 is a strategic asset, not just for the family, but for U.S. monetary policy.

"I think the stablecoins are actually going to be the savior of dollar hegemony in the world, not a detractor from it," he said, pointing to companies like Tether, which rank among the world's largest holders of U.S. Treasurys.

But unlike stablecoin giants like Tether and Circle, USD1 has yet to demonstrate broad-based adoption. Ripple's new RLUSD token, for example, has averaged around $50 million in daily centralized exchange volume — far outpacing USD1, which remains thinly traded.

According to Kaiko analysts, one major reason that USD1 lags rivals is the absence of institutional partners or promotional incentives that typically generate early traction in the stablecoin market.

Beyond its stablecoin, World Liberty separately launched its own native token called WLFI, which also had a tepid debut but ultimately raised at least $550 million through token sales. World Liberty funnels 75% of profits to family-related entities.

The $TRUMP coin's failure to generate meaningful traction on Binance is particularly notable, given the family's ties to the Abu Dhabi–based MGX fund, which used USD1 for a $2 billion investment in March.

Kaiko's McCarthy told CNBC that this kind of deal would typically boost visibility and volume — especially if paired with incentives like trading fee discounts or promotional listings.

"But with USD1, nothing's happened with that," McCarthy said. "It hasn't caused any sort of velocity of the asset on-chain."

The Trump family's crypto ventures continue to draw scrutiny, with the $TRUMP meme token recently holding a contest for top holders to get a "special VIP tour" and have dinner with the president.

Sen. Elizabeth Warren, D-Mass., described the winner's dinner as "an orgy of corruption" and accused the president of using the presidency "to make himself richer through crypto."

More than $5.2 billion in realized gains in the $TRUMP coin flowed to the top wallets, according to Inca Digital, while over 590,000 collectively lost $3.9 billion.

The gap between winners and losers has raised concerns about wealth concentration and retail trader exploitation — dynamics that critics say mirror the very financial system that crypto is trying to disrupt.

WATCH: Trump Media's bitcoin bet expands family's growing crypto empire