Democrats urge Treasury to ‘cease all attempts’ at Trump’s Bitcoin reserve plan over conflict concerns

US President Donald Trump’s Bitcoin reserve plans could face strong opposition from Democratic lawmakers, who cite conflicts of interest and a lack of public benefit.

In a letter to Secretary Scott Bessent, Democrat and House Representative Gerald E. Connolly of Michigan urged the US Treasury to “cease all attempts” to create a strategic crypto reserve.

Bitcoin reserve is an ‘unsound fiscal policy’

According to him, such an initiative offers “no discernible benefit” to the public and could instead line the pockets of Trump and his donors.

Connolly slammed the idea of a Bitcoin reserve as an “unsound fiscal policy,” arguing that it arbitrarily favours certain cryptocurrencies over others.

He also echoed criticism from the Federal Reserve, which reportedly called the idea “the dumbest ever.”

He argued there was “no strategic need” that would necessitate investing taxpayer dollars in the “volatile and speculative” cryptocurrency market.  

According to him, a Bitcoin reserve would function simply as a government-backed safety net for Bitcoin speculators, giving the assurance that “when the crash comes, the State will deploy this fund to rescue it.”

The lawmakers also accused Trump of bypassing Congress to push the plan forward, questioning the lack of legislative approval for a Bitcoin reserve.

He demanded transparency from the Treasury, asking for documents detailing how the administration intends to avoid conflicts of interest, asking:

Has the Presidential Working Group on Digital Asset Markets on which you serve, which has been tasked with developing a federal regulatory framework to govern the cryptocurrency reserve, reviewed financial disclosures by the Administration officials, including but not limited to Elon Musk?

Connolly also took particular issue with Trump’s involvement in the crypto space, pointing to potential conflicts of interest. 

He criticised the Trump Organization’s ties to the crypto platform World Liberty Financial and the Official Trump (TRUMP) memecoin, which he described as a “money grab” that has allowed Trump-linked entities to profit from over $100 million in trading fees.

No taxpayer money to be utilised

On March 6, President Donald Trump signed an Executive Order establishing the Strategic Bitcoin Reserve and a US Digital Asset Stockpile.

Under the order, every Bitcoin seized through civil and criminal forfeiture proceedings will be permanently held by the government.

Beyond Bitcoin, the US Digital Asset Stockpile will hold other forfeited cryptocurrencies.

However, unlike the Strategic Bitcoin Reserve, these assets are not considered strategic, meaning the government can still sell them if needed.

However, contrary to Connolly’s concerns, the White House insists that the Strategic Bitcoin Reserve won’t rely on taxpayer money. 

The executive order specifically directs the Treasury and Commerce Departments to explore budget-neutral strategies for future Bitcoin acquisitions, meaning no deficit spending, no tax hikes, and no additional financial burden on the public.

Beyond Connolly, other lawmakers, including Elizabeth Warren, have also been vocal in their opposition to Trump’s approach to cryptocurrency, warning that a government-backed Bitcoin reserve could be used as a vehicle for financial manipulation or to provide cover for illicit activity.

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