Democrat Rep. Gerald E. Connolly Demands US Treasury Intervene in Crypto Reserve Dispute

Democratic Representative Gerald Connolly is urging the U.S. Treasury to stop the Trump administration’s efforts to establish a strategic cryptocurrency reserve.

He sent a letter to Scott Bessent, emphasizing that President Trump has not consulted Congress regarding the creation of this crypto reserve. Connolly stated that it would result in poor fiscal policy, favoring certain currencies through social media while wasting taxpayer money on what one Federal Reserve official has called ‘the dumbest idea.’

Background on the Strategic Reserve

Connolly’s letter follows Trump’s executive order to create a Strategic Bitcoin Reserve and a digital asset stockpile, which was part of his plan titled ‘Strengthening American Leadership in Digital Financial Technology.’ This order includes various cryptocurrencies, such as Bitcoin, Ethereum, XRP, Solana, and Cardano.

Connolly raised concerns that such a reserve does not benefit the American public and would financially enrich Trump and his supporters. He highlighted that Trump has connections to the Official Trump meme coin and World Liberty Financial, a crypto platform that could gain significantly if the market performs well.

Trump’s $TRUMP memecoin has reportedly profited him, and associates are said to have earned up to $100 million through trading fees from this venture, viewed as his most lucrative scheme yet.

Calls for Transparency

Connolly demanded that all communications regarding the Bitcoin reserve be made public, including a list of companies financially linked to the Treasury. He requested information on whether the Presidential Working Group on Digital Asset Markets reviewed the financial disclosures of key officials, including tech billionaire Elon Musk.

Future Implications of the Crypto Reserve

If the crypto reserve serves as a new backing for the dollar, it may create instability in Treasury markets, suggesting a lack of confidence in the current dollar system. This could lead to uncertainty about the U.S. government’s debt obligations, resulting in higher interest rates and undermining investor trust.

Trump’s critics view the crypto reserve as disingenuous, undermining his other pro-crypto policies. A following administration might abandon the progress made in the crypto sector, potentially reversing gains from a moral perspective.