Democrat lawmaker urges Treasury to cease Trump’s Bitcoin reserve plans
House Representative Gerald E. Connolly from Michigan has recently intensified his criticism of the Trump administration’s proposed establishment of a strategic cryptocurrency reserve, urging the U.S. Treasury to halt any attempts to create such a reserve. In a letter addressed to Treasury Secretary Scott Bessent on March 13, Connolly articulated that the plan poses significant conflicts of interest related to former President Donald Trump while offering no tangible advantages to the American populace.
Connolly argued that the proposed reserve, which he conflated with the planned Digital Asset Stockpile, serves mainly to enrich Trump and his associates rather than delivering any economic benefits to citizens. He characterized the notion as a form of “unsound fiscal policy,” pointing to the selection of certain cryptocurrencies — particularly those promoted through social media — as a critical flaw. The Representative further condemned the initiative as a misuse of taxpayer money, echoing sentiments voiced by the Federal Reserve, which previously labeled it as “the dumbest idea ever.”
In his correspondence, Connolly stated, “No strategic need has arisen that would necessitate investment in the volatile and speculative cryptocurrency market.” He warned that establishing such a reserve might represent nothing more than a taxpayer-backed hedge designed to cushion speculative investors, should the cryptocurrency market experience a crash.
Despite the criticisms, the White House has maintained that the Digital Asset Stockpile will be limited to cryptocurrency already forfeited in federal cases. It also claims that the Bitcoin reserve would only utilize budget-neutral strategies to acquire additional assets, thus ensuring no financial burden would fall on taxpayers directly. Nevertheless, Connolly indicated that Trump’s administration did not gain congressional approval for the reserve initiative nor did they engage adequately with Congress regarding its implications.
The letter raised multiple points of contention, including the potential conflict between Trump’s official duties and the financial interests held by his business, the Trump Organization, in the cryptocurrency platform World Liberty Financial. Connolly denounced the Trump (TRUMP) memecoin as a blatant “money grab,” suggesting it has generated over $100 million in trading fees for entities linked to Trump, which he branded as the former president’s “most lucrative get-rich scheme yet.”
Additionally, Connolly’s inquiries extended to requests for documentation and communications surrounding the Bitcoin reserve’s creation, alongside a catalog of companies in which the Treasury has vested interests. He pressed Secretary Bessent to clarify whether the Presidential Working Group on Digital Asset Markets had evaluated the financial disclosures of administration officials, including high-profile figures such as Elon Musk.
The Strategic Bitcoin Reserve is expected to utilize cryptocurrencies that have been confiscated through federal civil or criminal proceedings. Meanwhile, the Digital Asset Stockpile might comprise a range of cryptocurrencies beyond Bitcoin, such as XRP, Solana, Cardano, and Ether.
As the dialogue surrounding cryptocurrency regulation heightens, the implications of these proposals bring forth questions about transparency, accountability, and the broader impact on taxpayers, particularly amid a landscape marked by volatility and speculation in the digital asset market.
