Democratic Representative Gerald E. Connolly has urged the U.S. Treasury to abandon its plans for a Strategic Bitcoin Reserve, arguing that the initiative would primarily benefit President Donald Trump and his allies rather than the American public.
In a March 13 letter to Treasury Secretary Scott Bessent, Connolly criticized the proposed reserve, calling it “unsound fiscal policy” that selectively favors certain cryptocurrencies based on social media influence. He further claimed that the plan would serve as a taxpayer-backed hedge for Bitcoin speculators.
Concerns Over Taxpayer Funds and Lack of Congressional Oversight
Connolly, who serves as the ranking Democrat on the House Oversight Committee, emphasized that there is no strategic need for the U.S. government to invest in the volatile crypto market.
“[It] would constitute nothing more than a highly speculative taxpayer-backed hedge to provide Bitcoin speculators the assurance that when the crash comes, the State will deploy this fund to rescue it,” he wrote.
The Federal Reserve has reportedly dismissed the plan as “the dumbest idea ever”, further fueling opposition. Connolly also noted that the Trump administration failed to consult Congress or obtain authorization before moving forward with the Bitcoin reserve.
White House Defends Crypto Stockpile Strategy
Despite opposition, the White House has clarified that the Digital Asset Stockpile will only hold onto cryptocurrency already forfeited in federal cases, while the Bitcoin reserve will operate using budget-neutral strategies to avoid impacting taxpayers.
Under the proposed framework, the Strategic Bitcoin Reserve will be built from confiscated digital assets, while the Digital Asset Stockpile could include other cryptocurrencies like XRP, Solana, Cardano, and Ether.
Conflict of Interest Allegations Against Trump
Connolly’s letter also raised ethics concerns, pointing to potential conflicts of interest between Trump’s presidential duties and his personal financial ventures.
He specifically accused Trump of profiting from World Liberty Financial, a crypto platform linked to the Trump Organization, and the controversial Official Trump (TRUMP) memecoin.
The TRUMP token has reportedly generated over $100 million in trading fees, which Connolly described as “Trump’s most lucrative get-rich scheme yet.”
Similar concerns were raised by Rep. Maxine Waters in January when she criticized Trump’s memecoin, comparing its launch to a “rug pull” and calling it a reflection of “the worst of crypto.”
Call for Transparency in Treasury’s Crypto Dealings
In his letter, Connolly requested documents and communications related to the Bitcoin reserve, as well as details on the Treasury’s crypto-related financial interests.
He also demanded transparency on whether the Presidential Working Group on Digital Asset Markets, which includes figures like Elon Musk, has reviewed financial disclosures from administration officials.
As debates over the Strategic Bitcoin Reserve continue, the controversy underscores the broader struggle over the U.S. government’s role in cryptocurrency—and whether Trump’s policies are truly aimed at national interests or personal gain.
