Rep. Gerald E. Connolly, the Ranking Member of the House Oversight and Government Reform Committee, has called on the US Treasury Department to reconsider its plans for a strategic Bitcoin reserve and a digital asset stockpile.
In a letter addressed to Treasury Secretary Scott Bessent, Connolly criticized the initiative as both fiscally irresponsible and politically motivated. He cautioned that this effort would provide no discernible public advantage while disproportionately benefiting President Donald Trump and his associates.
Trump’s Executive Order
Connolly’s concerns arise from Trump’s March 6 executive order, which established the Strategic Bitcoin Reserve and US Digital Asset Stockpile. This order builds upon a broader directive issued on January 23 entitled “Strengthening American Leadership in Digital Financial Technology.”
The initiative aims to position the federal government as a significant holder of Bitcoin (BTC), Ethereum (ETH), XRP, Solana (SOL), and Cardano (ADA). Trump has characterized this move as a means to enhance US leadership in the realm of digital assets.
Connolly highlighted Trump’s dramatic shift in attitude towards cryptocurrencies, noting that the former president had previously dismissed digital assets as a “scam” during his initial term.
However, the current administration is reportedly preparing to allocate federal funds to the cryptocurrency sector—a strategy Connolly deems an attempt to manipulate financial markets for personal and political ends.
He argues that this initiative effectively chooses winners among digital currencies and artificially boosts demand for assets to which Trump has financial interests.
Conflicts of Interest
The Ranking Member pointed out several potential conflicts of interest, including Trump’s alleged investment in World Liberty Financial, a digital asset firm that aims to serve as a crypto-based lending and investment platform.
Connolly expressed concerns that government purchases of cryptocurrencies could directly benefit Trump’s financial portfolio, especially if the administration favors assets that coincide with his private holdings.
He also referenced Trump’s connection to the $TRUMP memecoin, which has seen a surge in value due to speculation driven by his political commentary.
Reports suggest that entities associated with Trump have amassed over $100 million in trading fees related to the token, raising alarms that the administration’s cryptocurrency initiatives may further fuel financial speculation linked to the president.
Lack of Congressional Oversight
Connolly also voiced criticism over the administration’s decision to sidestep Congress during the establishment of the reserve, arguing that Trump has not sought congressional approval or engaged in discussions with lawmakers regarding the reserve’s potential risks or benefits.
He cautioned that, without congressional oversight, this initiative risks becoming a vehicle for political manipulation rather than a sound financial strategy.
Connolly cited skepticism from financial experts, including a Federal Reserve official who reportedly deemed the proposal as “the dumbest idea” ever.
He urged the Treasury Department to promptly cease all activities related to the strategic crypto reserve. He requested a comprehensive briefing for House Oversight Committee staff by March 27 and sought to clarify the reserve’s legal grounding.
In addition, he requested details on the process for acquiring and managing these assets, the potential impact on cryptocurrency markets, and any financial connections between the White House and digital asset firms.
As of now, the Treasury Department has not responded to Connolly’s requests. His letter indicates an increasing opposition from congressional Democrats, who are becoming more vigilant regarding Trump’s expanding role in the digital asset space.
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