Rep. Gerald E. Connolly, the Rating Member of the Home Oversight and Authorities Reform Committee, urged the US Treasury Division to desert plans to determine a strategic Bitcoin reserve and the digital asset stockpile.
In a letter to Treasury Secretary Scott Bessent, Connolly condemned the hassle as fiscally irresponsible and politically motivated. He warned that the initiative would serve no clear public profit whereas considerably enriching President Donald Trump and his allies.
Trump’s government order
Connolly’s considerations stem from Trump’s March 6 government order establishing the Strategic Bitcoin Reserve and US Digital Asset Stockpile, which builds on a broader January 23 directive, “Strengthening American Management in Digital Monetary Know-how.”
The initiative would place the federal authorities as a significant holder of Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Trump has known as the transfer a solution to cement US dominance in digital belongings.
Connolly famous Trump’s sharp change in stance on crypto, highlighting that he had beforehand dismissed digital belongings as a “rip-off” throughout his first time period.
Nonetheless, his administration is now getting ready to allocate federal funds to the sector — an method Connolly criticized as an try to govern monetary markets for political and private acquire.
He argued that the transfer quantities to choosing winners amongst digital currencies and creating synthetic demand for belongings that Trump has monetary publicity to.
Conflicts of Curiosity
The Rating Member outlined a number of potential conflicts of curiosity, together with Trump’s reported stake in World Liberty Monetary, a digital asset agency that goals to operate as a crypto-based lending and funding platform.
Connolly warned that authorities purchases of crypto may straight profit Trump’s monetary holdings, significantly if the administration prioritizes belongings that align together with his personal investments.
He additionally pointed to Trump’s involvement within the $TRUMP memecoin, which has surged in worth primarily based on hypothesis surrounding his political statements.
He pointed to studies that entities linked to Trump have generated over $100 million in buying and selling charges from the token, elevating considerations that the administration’s crypto initiatives may additional drive monetary hypothesis tied to the president.
Lack of Congressional oversight
Connolly additionally criticized the administration for bypassing Congress in its push to create the reserve, arguing that Trump had not sought legislative authorization nor engaged in session with lawmakers in regards to the reserve’s potential dangers or advantages.
He warned that with out congressional oversight, the initiative may turn out to be a software for political affect somewhat than a authentic monetary technique.
He additionally referenced skepticism from monetary specialists, citing a Federal Reserve official who reportedly described the plan as “the dumbest concept” ever.
Connolly urged the Treasury Division to right away halt all plans associated to the strategic crypto reserve. He requested a full briefing for Home Oversight Committee workers by March 27 and sought readability on the reserve’s authorized justification.
He additionally requested readability concerning the method for buying and managing the belongings, the potential impression on crypto markets, and any monetary ties between the White Home and digital asset companies.
The Treasury Division has not but responded to Connolly’s request. His letter alerts rising opposition from congressional Democrats, who’re more and more scrutinizing Trump’s increasing involvement within the digital asset business.
