Lawmaker Opposes Strategic Bitcoin Reserve Proposal
A Democratic representative has voiced strong opposition to U.S. President Donald Trump’s initiative to bolster government Bitcoin holdings through the establishment of a strategic reserve. House Representative Gerald E. Connolly from Virginia has called on the U.S. Department of the Treasury to abandon this proposal, raising concerns about potential conflicts of interest surrounding the President’s push for such a reserve.
Call to Halt the Bitcoin Reserve Initiative
In a correspondence directed at U.S. Treasury Secretary Scott Bessent, Connolly urged the department to “cease all attempts” related to the creation of a strategic Bitcoin reserve. He contended that this move would primarily benefit Trump and his associates while burdening U.S. taxpayers. “The establishment of a strategic cryptocurrency reserve is set to profit the President and his closest allies at the expense of American citizens,” Connolly stated, adding a strong appeal to terminate any plans for the reserve.
Concerns About Major Cryptocurrency Stakeholders
Connolly highlighted that Trump, along with his family and close allies, holds significant cryptocurrency investments. He referenced the Trump Organization’s substantial stake in World Liberty Financial, a venture that aims to function as a digital asset bank where users can borrow, lend, and invest in cryptocurrencies. The lawmaker pointed out that Trump himself has touted World Liberty Financial as “the future of finance.” He also mentioned that Trump’s sons, Eric and Donald Trump Jr., have publicly supported various cryptocurrencies, underlining the family’s ties to the crypto space.
Questionable Financial Benefits
The Virginia representative noted that President Trump introduced a new meme coin called TRUMP in January, claiming that affiliated entities have potentially earned up to $100 million in trading fees from this endeavor, which he characterized as Trump’s “most lucrative get-rich scheme yet.” He emphasized that the proposed strategic reserve offers “no discernible benefit to the American populace.”
Critique of Fiscal Responsibility
Connolly criticized the idea of a Bitcoin reserve as an “unsound fiscal policy,” arguing that the selection of favored cryptocurrencies would likely be influenced by social media trends. He described the initiative as a waste of taxpayer resources, echoing a sentiment from a federal reserve official who labeled it “the dumbest idea” ever conceived. Historically, the U.S. has established reserves for strategically important commodities, like petroleum, particularly during economic crises. Connolly argued that there is no current strategic justification for investing in the unpredictable and speculative cryptocurrency market. He characterized the Bitcoin reserve as merely a speculative hedge funded by taxpayers, cautioning that if the cryptocurrency market crashes, the government could be expected to step in with taxpayer money to mitigate the fallout.
