A member of the Democratic Party has urged the US Treasury to “halt all efforts” to establish a strategic cryptocurrency reserve in the country, citing potential conflicts of interest involving President Donald Trump and asserting that such a reserve would not serve the American public.
House Representative Gerald E. Connolly from Michigan expressed his concerns in a letter to Treasury Secretary Scott Bessent, criticizing the idea of a “cryptocurrency reserve” and claiming it offers “no clear benefits to the American people.” Instead, he argued it would primarily enhance the wealth of the president and his supporters.
Connolly pointed out that he sees no distinction between the Strategic Bitcoin Reserve and the Digital Asset Stockpile, labeling Trump’s initiative as “poor fiscal policy” for prioritizing selected cryptocurrencies over others based on social media influences.
He further contended that the Trump administration’s plan would squander taxpayer money, with the Federal Reserve having previously labeled it as “the dumbest idea ever.”
“There has been no strategic justification for investing in the unpredictable and speculative cryptocurrency market,” Connolly, who is the leading Democrat on the House committee overseeing government reform, emphasized in his letter.
“This would merely represent a speculative hedge funded by taxpayers, providing assurance to bitcoin speculators that when their investments falter, the government would step in to support them.”
Letter from Gerald E. Connolly to Treasury Secretary Scott Bessent.
Nevertheless, the White House has stated that the Digital Asset Stockpile will only manage cryptocurrency that has already been forfeited. Meanwhile, acquisitions for the Bitcoin (BTC) reserve will be conducted through budget-neutral measures to avoid impacting taxpayers.
Connolly also accused Trump of neglecting to consult Congress regarding the Bitcoin reserve proposal, or to secure congressional authorization for its establishment.
Moreover, Connolly alleged that there are conflicts of interest arising from Trump’s presidential responsibilities and the Trump Organization’s ownership stake in the crypto platform World Liberty Financial, as well as its involvement with the Official Trump (TRUMP) memecoin.
The representative referred to the TRUMP token as a “money grab,” noting that entities linked to Trump have profited over $100 million in trading fees from it.
Connolly remarked that this venture might be Trump’s “most profitable scheme yet.”
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Representative Maxine Waters, a Democratic colleague on the House Financial Services Committee, also condemned Trump’s memecoin on January 20, equating it to a rug pull and criticizing the launch as a reflection of the “worst” side of crypto.
Connolly has requested that Bessent provide documents and communications related to the Bitcoin reserve’s establishment as well as a comprehensive overview of actions taken by the Trump administration to mitigate any conflicts of interest.
He has additionally requested a list of companies with crypto-related financial interests by the Treasury, including the question:
“Has the Presidential Working Group on Digital Asset Markets, which you are a part of and tasked with creating a federal regulatory framework for the cryptocurrency reserve, reviewed financial disclosures from Administration officials, including Elon Musk?”
The Strategic Bitcoin Reserve will initially comprise cryptocurrencies forfeited in federal criminal or civil proceedings. In contrast, the Digital Asset Stockpile will feature other cryptocurrencies besides Bitcoin, such as XRP (XRP), Solana (SOL), Cardano (ADA), and Ether (ETH).
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