Democrat lawmaker urges the US Treasury to cease Trump’s crypto reserve plan

A Democratic lawmaker is urging the U.S. Treasury to block the Trump administration’s efforts to establish a cryptocurrency reserve, citing concerns over conflicts of interest. 

In a letter dated March 13 to Treasury Secretary Scott Bessent, Representative Gerald E. Connolly of Michigan argued that the reserve would provide “no clear benefit to the American people” but would instead financially benefit Trump and his supporters.

Connolly criticized the administration’s Strategic Bitcoin Reserve and Digital Asset Stockpile, claiming the initiative amounted to “unsound fiscal policy” by favoring specific cryptocurrencies based on social media influence. 

He also pointed to the Federal Reserve’s harsh criticism of the plan, calling it “the dumbest idea ever.”

“No strategic necessity justifies taxpayer-funded investments in the volatile and speculative crypto market,” Connolly wrote, emphasizing that the fund could end up serving as a safety net for crypto investors during market crashes.

The White House, however, clarified that the Digital Asset Stockpile would consist of already forfeited cryptocurrencies, while the Bitcoin reserve would acquire assets through budget-neutral strategies, avoiding taxpayer impact.

Connolly further accused Trump of bypassing Congress to push the reserve plan and raised concerns about conflicts of interest. 

He highlighted Trump’s ties to World Liberty Financial and the Official Trump (TRUMP) memecoin, which allegedly generated over $100 million in trading fees.

Calling the TRUMP token a “cash grab,” Connolly’s criticism echoed similar concerns from Representative Maxine Waters, who referred to the memecoin as an example of crypto’s worst excesses.

Connolly has requested that the Treasury provide documents and communications related to the reserve's creation, as well as steps taken to mitigate conflicts of interest. 

He also demanded a list of crypto-related financial holdings within the Treasury and asked whether the Presidential Working Group on Digital Asset Markets had reviewed financial disclosures from administration officials, including Elon Musk.

According to current plans, the Strategic Bitcoin Reserve will initially hold assets seized in federal cases, while the Digital Asset Stockpile may include other cryptocurrencies like XRP, Solana, Cardano, and Ethereum.