Rep. Gerald E. Connolly, the Ranking Member of the House Oversight and Government Reform Committee, has called on the US Treasury Department to reconsider its plan to create a strategic Bitcoin reserve and a digital asset collection.
In a letter to Treasury Secretary Scott Bessent, Connolly criticized this initiative as financially irresponsible and driven by political motives. He expressed concerns that the effort would lack tangible benefits for the public while greatly enriching President Donald Trump and his associates.
### Trump’s Executive Order
Connolly’s concerns arise from Trump’s March 6 executive order that established the Strategic Bitcoin Reserve and the US Digital Asset Stockpile, which builds upon a broader directive from January 23 titled “Strengthening American Leadership in Digital Financial Technology.”
This plan would position the federal government as a significant holder of cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Trump has argued that this move would solidify the US’s leadership in the digital asset space.
Connolly pointed out the stark reversal in Trump’s view on cryptocurrencies, noting that he had previously labeled digital assets as a “scam” during his initial term. However, now the administration seems poised to invest federal money into this sector—an act Connolly characterized as a means of manipulating financial markets for personal and political gain.
He contended that this initiative results in favoring certain digital currencies and artificially inflating demand for assets in which Trump has personal financial interests.
### Conflicts of Interest
The Ranking Member highlighted several potential conflicts of interest, including Trump’s reported investment in World Liberty Financial, a digital asset company that aims to operate as a crypto-focused lending and investment service.
Connolly cautioned that government acquisitions of cryptocurrencies could directly benefit Trump’s financial interests, especially if priorities are given to assets that mirror his private investments. Additionally, he cited Trump’s connection to the $TRUMP memecoin, which has experienced a significant surge fueled by speculation linked to his political declarations.
He mentioned reports indicating that ventures associated with Trump have earned over $100 million in trading fees from the token, raising alarms that the administration’s crypto strategies could further enhance financial speculation linked to him.
### Lack of Congressional Oversight
Connolly also took issue with the administration’s approach of circumventing Congress in the establishment of the reserve, arguing that Trump had not pursued legislative approval or engaged lawmakers in discussions regarding the risks or benefits of the reserve.
He warned that, in the absence of congressional oversight, this initiative might transform into a tool for political leverage rather than a genuine financial strategy. Connolly referred to skepticism from financial experts, including a Federal Reserve official who reportedly labeled the proposal as “the dumbest idea” ever.
He urged the Treasury Department to immediately halt all actions related to the strategic crypto reserve. He requested a comprehensive briefing for House Oversight Committee staff by March 27 and sought clarity on the legal basis for the reserve.
Connolly further inquired about the processes involved in acquiring and managing the assets, the potential repercussions for cryptocurrency markets, and any financial connections between the White House and digital asset firms.
The Treasury Department has yet to respond to Connolly’s requests. His letter underscores growing resistance from congressional Democrats, who are increasingly scrutinizing Trump’s expanding role in the digital asset sector.