Key Points
- Democratic lawmaker urges US Treasury to halt plans for a Bitcoin reserve.
- US President Donald Trump is accused of bypassing Congress in establishing the Bitcoin reserve.
US President Donald Trump and his administration are planning to build a strategic Bitcoin reserve. However, this move has met with opposition from a Democratic lawmaker who has called on the US Treasury to stop all attempts to create a cryptocurrency reserve for the country.
Concerns Raised Over Bitcoin Reserve
In a letter dated March 13, House Representative Gerald E. Connolly of Michigan addressed US Treasury Secretary Scott Bessent. Connolly argued that creating a crypto reserve would not benefit the American people, but would instead only serve the interests of the US President and his donors.
Connolly also criticized the Trump administration for failing to distinguish between the Strategic Bitcoin Reserve and the Digital Asset Stockpile. He labeled the plan as an “unsound fiscal policy” and accused the Trump team of favoring certain cryptocurrencies based on their social media influence.
Connolly further argued that this initiative would waste taxpayer money. He cited the Federal Reserve’s characterization of the plan as “the dumbest idea ever”. In his letter, Connolly stated that there is no strategic need that would necessitate investment in the volatile and speculative cryptocurrency market. He added that such a move would constitute a highly speculative taxpayer-backed hedge to provide Bitcoin speculators with assurance that the state would deploy this fund to rescue it when a crash occurs.
Did Trump Bypass Congress?
Last week, Trump signed the executive order to create a strategic Bitcoin reserve. The White House clarified that the Digital Asset Stockpile would consist solely of already forfeited cryptocurrencies. The Bitcoin reserve, on the other hand, would be built using budget-neutral strategies to ensure that no burden is placed on taxpayers.
Connolly accused Trump of bypassing Congress in his decision to establish the Bitcoin reserve. He requested Treasury Secretary Bessent to provide documentation and communications related to the reserve’s creation. He also demanded details on measures taken to prevent conflicts of interest.
Connolly raised concerns over potential conflicts of interest, pointing out Trump’s ties to World Liberty Financial, a Trump-owned DeFi platform. He also questioned the launch of the Official TRUMP (TRUMP) meme coin, calling it a “money grab” and alleging that it has generated over $100 million in trading fees for Trump-linked entities.
Economist and gold advocate Peter Schiff criticized the US government’s focus on Bitcoin amid a rise in gold prices. He suggested that the government should focus on adding to its existing gold reserve instead of figuring out how to add to its Bitcoin reserve.
Following the decision to establish a Bitcoin reserve, the price of Bitcoin has remained under selling pressure, currently hovering around $82,000. Despite cooling US inflation data for February, bulls have failed to rally strongly. Some market analysts believe that the Bitcoin price could further correct to $75,000 and lower if it fails to hold above $80,000. Amid the Trump tariff war, the crypto market has lost over $800 billion in the last two months.
