A Democratic lawmaker has urged the US Treasury to “halt all efforts” to establish a strategic cryptocurrency reserve in the United States, pointing to conflicts of interest involving US President Donald Trump and asserting that such a reserve would not serve the interests of the American public.
House Representative Gerald E. Connolly from Michigan expressed his concerns regarding the “cryptocurrency reserve” in a letter to Treasury Secretary Scott Bessent dated March 13, claiming that it offers “no clear advantage to the American populace” and would instead primarily benefit the president and his financial backers.
Connolly, who did not differentiate between the Strategic Bitcoin Reserve and the Digital Asset Stockpile, described Trump’s initiatives as “unsound fiscal policy,” as they favor specific cryptocurrencies over others through social media influence.
He further stated that the Trump administration’s proposal would misallocate taxpayer dollars, drawing criticism from the Federal Reserve, which called it “the dumbest idea ever.”
“There has been no strategic imperative that justifies investing in the unstable and speculative cryptocurrency market,” Connolly, the ranking Democrat on the House Committee on Oversight and Government Reform, noted in the letter.
“This would merely serve as a highly speculative, taxpayer-funded hedge to assure bitcoin speculators that the State will step in with this fund to bail them out when a market crash occurs.”
Democrat Gerald E. Connolly’s correspondence with Treasury Secretary Scott Bessent. Source: US Committee on Oversight and Government Reform Democrats
Nevertheless, the White House has clarified that the Digital Asset Stockpile will only contain cryptocurrencies that have already been forfeited. Concurrently, it states that the Bitcoin (BTC) reserve will acquire assets solely through budget-neutral methods that will not affect taxpayers.
Connolly contended that Trump did not consult Congress regarding the Bitcoin reserve initiative, nor did he seek congressional approval for its establishment.
He also accused Trump of having conflicts of interest due to his presidential responsibilities and the Trump Organization’s ownership of the crypto platform World Liberty Financial, as well as the Official Trump (TRUMP) memecoin.
The Democrat characterized the TRUMP token as a “money grab” that has enabled Trump-affiliated parties to earn more than $100 million from trading fees.
Connolly referred to this operation as Trump’s “most profitable get-rich scheme yet.”
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Representative Maxine Waters, another Democrat on the House Financial Services Committee, also condemned Trump’s memecoin on January 20, likening it to a rug pull and labeling the launch as representing the “worst of crypto.”
Connolly has requested that Bessent provide all documents and communications pertaining to the establishment of the Bitcoin reserve, along with a comprehensive list of actions taken by the Trump administration to mitigate potential conflicts of interest.
He has also demanded a list of companies in which the Treasury holds crypto-related financial stakes. Additionally, he inquired:
“Has the Presidential Working Group on Digital Asset Markets, on which you serve, been tasked with reviewing financial disclosures from Administration officials, including but not limited to Elon Musk, in relation to the development of a federal regulatory framework to oversee the cryptocurrency reserve?”
The Strategic Bitcoin Reserve is set to initially utilize cryptocurrencies forfeited in federal criminal or civil cases. Meanwhile, the Digital Asset Stockpile will consist of non-Bitcoin cryptocurrencies, potentially including XRP (XRP), Solana (SOL), Cardano (ADA), and Ether (ETH).
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