Source: Cointelegraph Original: "{title}"
A Democratic congressman has called on the U.S. Treasury to "stop all attempts" to establish a strategic cryptocurrency reserve in the United States, arguing that the move presents a conflict of interest with President Trump and believes that this reserve will not provide any real benefits to the American public.
Michigan Congressman Gerald E. Connolly criticized the "cryptocurrency reserve" in a letter to Treasury Secretary Scott Bessent on March 13, stating that it "offers no obvious benefits to the American people" and instead would greatly benefit the president and his backers.
In his letter, Connolly did not distinguish between "strategic Bitcoin reserves" and "digital asset reserves," stating that Trump's plan would constitute "unsound fiscal policy" as it favors certain specific cryptocurrencies through social media.
He further pointed out that the Trump administration's plan would waste taxpayer money, and the Federal Reserve has referred to such plans as "the dumbest idea ever."
Connolly, the leader of the House Committee on Oversight and Government Reform Democrats, stated in the letter: "There is currently no strategic need to invest in the highly volatile and speculative cryptocurrency market."
"It is merely a highly speculative, taxpayer-backed hedge that provides assurance to Bitcoin speculators that the nation will deploy these funds to save it when a crisis hits."
A letter from Democratic Congressman Gerald E. Connolly to Treasury Secretary Scott Bessent. Source: U.S. House Committee on Oversight and Government Reform Democrats
However, the White House stated that the digital asset reserve would only hold confiscated cryptocurrencies. Meanwhile, Bitcoin (BTC) reserves would only be acquired through budget-neutral strategies, not affecting taxpayer interests.
Connolly also stated that Trump did not consult Congress when formulating the Bitcoin reserve plan, nor did he obtain congressional authorization.
He further claimed that while fulfilling his presidential duties, Trump's family business, the Trump Organization, still holds ownership of the cryptocurrency platform World Liberty Financial and has a conflict of interest with the official Trump (TRUMP) memecoin.
Democrats have referred to the TRUMP token as a "money-making tool" and stated that Trump-related entities have profited over $100 million from transaction fees associated with the token.
"This could be Trump's most profitable get-rich-quick scheme to date," he added.
House Financial Services Committee Democratic Congresswoman Maxine Waters also criticized Trump's memecoin on January 20, calling it "the worst manifestation of the crypto industry" and accusing the token of "rug pull" behavior.
Connolly has requested Bessent to provide documents and communications related to the creation of the Bitcoin reserve, as well as a complete list of steps taken by the Trump administration to avoid conflicts of interest.
Additionally, he requested a list of financial investment firms related to cryptocurrencies from the Treasury and questioned:
"Has the Presidential Working Group on Digital Asset Markets, which you serve, responsible for developing the federal regulatory framework for cryptocurrency reserves, reviewed the financial disclosures of government officials (including but not limited to Musk)?"
The strategic Bitcoin reserve would initially use cryptocurrencies confiscated in federal criminal or civil cases. Meanwhile, the digital asset reserve would consist of cryptocurrencies other than Bitcoin, such as Ripple (XRP), Solana (SOL), Cardano (ADA), and Ethereum (ETH).
Related: Vermont Follows SEC's Lead, Drops Staking Lawsuit Against Coinbase
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