Opposition to US Treasury Department’s Bitcoin Reserve Plans
Rep. Gerald E. Connolly, the Ranking Member of the House Oversight and Government Reform Committee, has strongly opposed the US Treasury Department’s plans to establish a strategic Bitcoin reserve and digital asset stockpile.
Letter to Treasury Secretary Scott Bessent
In a letter to Treasury Secretary Scott Bessent, Connolly criticized the effort as fiscally irresponsible and politically motivated. He argued that the initiative would not provide any clear public benefit and would only serve to enrich President Donald Trump and his associates.
Trump’s Executive Order
Connolly’s concerns arise from Trump’s executive order on March 6, which created the Strategic Bitcoin Reserve and US Digital Asset Stockpile. This order builds upon a previous directive issued on January 23 called “Strengthening American Leadership in Digital Financial Technology.”
- The initiative aims to make the federal government a major holder of various digital assets, including Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA).
- Trump views this move as a way to solidify US dominance in the digital asset space.
Connolly highlighted Trump’s change in stance towards cryptocurrencies, noting that he had previously referred to them as a “scam” during his first term. However, the administration’s current approach of allocating federal funds to the sector has been criticized by Connolly as an attempt to manipulate financial markets for personal and political gain.
Conflicts of Interest
Connolly pointed out several potential conflicts of interest, such as Trump’s reported stake in World Liberty Financial, a digital asset firm that focuses on crypto-based lending and investment.
- Government purchases of crypto assets could directly benefit Trump’s financial interests, particularly if assets align with his private investments.
- Trump’s involvement in the $TRUMP memecoin, which has seen a surge in value based on speculation surrounding his political statements, raises concerns about financial speculation tied to the president.
Lack of Congressional Oversight
Connolly criticized the administration for bypassing Congress in its efforts to establish the reserve without seeking legislative authorization or consulting lawmakers about potential risks and benefits.
- He warned that without congressional oversight, the initiative could be used for political influence rather than a legitimate financial strategy.
- Financial experts have also expressed skepticism, with a Federal Reserve official reportedly calling the plan “the dumbest idea” ever.
Call to Action
Connolly urged the Treasury Department to halt all plans related to the strategic crypto reserve and requested a full briefing for House Oversight Committee staff by March 27. He also sought clarity on the reserve’s legal justification, the process for acquiring and managing assets, potential market impacts, and any financial ties between the White House and digital asset firms.
The Treasury Department has yet to respond to Connolly’s concerns, indicating a growing opposition from congressional Democrats towards Trump’s increasing involvement in the digital asset industry.
