Trump should scrap Bitcoin reserve for ‘enriching president and donors,’ lawmaker says

It’s been called “the dumbest idea ever.”

It was so bad, Federal Reserve officials almost kicked people out of the room for suggesting it, Perianne Boring, the CEO of The Digital Chamber, said in an interview on YouTube.

But that hasn’t stopped President Donald Trump from pushing ahead with plans to build a US crypto reserve even as his family’s digital assets businesses are poised to benefit from the move.

With the long-desired reserve failing to stem a plunge in crypto prices, lawmakers are now rounding on the initiative as having “no discernible benefit” for the public.

‘Extreme financial risk’

“I urge you to cease all attempts to create the strategic cryptocurrency reserve,” Representative Gerry Connolly, the top Democrat on the House Oversight Committee, said in a five-page letter to Treasury Secretary Scott Bessent.

“Such a reserve provided no discernible benefit to the American people but would significantly enrich the president and his donors.”

Connolly also warned that the reserve would “artificially prop up certain digital assets while exposing taxpayers to extreme financial risk.”

On March 6, Trump issued an executive order outlining the Strategic Bitcoin Reserve and US Digital Asset Stockpile, a plan to consolidate the government’s seized crypto holdings.

The order directs agencies to transfer all forfeited Bitcoin into a government-controlled reserve and allows for additional Bitcoin acquisitions — but only if they are “budget-neutral” and don’t impose costs on taxpayers.

Stockpile

For other cryptocurrencies — including Ethereum, Solana, XRP, and Cardano — the administration would not purchase new assets but instead store existing holdings in a government-managed Digital Asset Stockpile.

Connolly, who represents a district in northern Virginia, is sceptical the administration will refrain from tapping taxpayer funds to support the reserves.

“At no point has the president sought congressional authorization to create this reserve,” Connolly said.

Moreover, Connolly focuses on Trump’s personal financial interests in crypto, a development that has drawn fire from many in the crypto industry.

His family and business associates have deep ties to the industry, most notably through World Liberty Financial, a crypto venture the Trump Organization holds a significant stake in.

The company, described as a “digital asset bank”, allows users to borrow, lend, and invest in cryptocurrencies.

Memecoin

If the Trump administration does follow through with a strategic crypto reserve, it could legitimise and drive up the value of these assets — directly benefiting Trump and his donors and financial partners.

Another potential conflict comes from the president’s self-branded TRUMP memecoin, which generated over $100 million in trading fees in its first month.

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.