A prominent Democrat lawmaker has taken a strong stance against the Trump administration’s plans to create a strategic cryptocurrency reserve in the United States. House Representative Gerald E. Connolly of Michigan is urging the US Treasury to halt all proposals, pointing to potential conflicts of interest involving President Trump and the lack of benefits for the American public.
In his letter dated March 13, Connolly emphasized that these initiatives provide “no discernible benefit to the American people” while significantly enriching Trump and his affiliates. He categorized the proposed cryptocurrency reserve as “unsound fiscal policy,” arguing that it unjustly favors certain cryptocurrencies publicized through social media channels.
Connolly’s critical analysis includes the assertion that the plans represent a profound waste of taxpayer dollars, a notion echoed by the Federal Reserve, which once labeled the concept as “the dumbest idea ever.” He stated, “No strategic need has arisen that would necessitate investment in the volatile and speculative cryptocurrency market. This initiative amounts to a speculative taxpayer-backed hedge, providing assurance to Bitcoin speculators that the government will rescue them during market crashes.”
Despite these concerns, the White House has defended the Digital Asset Stockpile, claiming it will exclusively encompass cryptocurrencies already forfeited in criminal or civil cases. Additionally, they assert that any acquisitions for the Strategic Bitcoin Reserve will follow budget-neutral strategies that supposedly won’t affect taxpayers. However, Connolly underscored that the Trump administration had neither consulted Congress nor sought the necessary authorization for such endeavors, thereby raising serious ethical questions.
In a broader context, Connolly highlighted the potential conflicts of interest related to Trump’s presidential obligations and his ownership of the crypto platform World Liberty Financial, along with the Trump memecoin, which he labeled as a mere “money grab.” This venture has reportedly generated more than $100 million in trading fees, sparking debate about the ethical implications of such financial gains.
Furthermore, Representative Maxine Waters, a fellow Democrat on the House Financial Services Committee, has previously criticized Trump’s memecoin initiative, referring to it as a “rug pull” that epitomizes the worst aspects of the cryptocurrency market. Connolly’s request to Treasury Secretary Scott Bessent includes demands for documentation related to the Bitcoin reserve’s creation and a detailed list of measures taken to sidestep any conflict of interest.
As the debate unfolds, it remains to be seen how the situation will develop and whether regulatory frameworks will emerge to govern these innovative yet contentious cryptocurrency ventures. The implications of this resistance against the proposed Strategic Bitcoin Reserve not only resonate within the political realm but also signal a cautious approach toward cryptocurrency investment strategies in government.
