Congressional Foothold on Cryptocurrency: Lawmaker Urges Treasury to Reconsider Trump's Bitcoin Reserve Plans

Democratic Lawmaker Calls on Treasury to Abandon Trump's Bitcoin Reserve Plans

A senior Democratic lawmaker has called on the US Treasury Department to abandon plans to create a bitcoin reserve, which were reportedly initiated by the Trump administration.

In a letter to Treasury Secretary Steven Mnuchin, Representative Maxine Waters, Chair of the House Financial Services Committee, expressed concerns that the proposed reserve could undermine the stability of the US financial system and facilitate money laundering and terrorist financing.

The Trump administration had reportedly considered creating a bitcoin reserve as a way to stabilize the cryptocurrency market and promote its adoption. However, the plan has been met with skepticism by many lawmakers and financial experts, who argue that it could create new risks for the financial system.

In her letter, Representative Waters cited the lack of regulatory oversight and the potential for the reserve to be used for illicit activities as major concerns. She also noted that the creation of a government-backed bitcoin reserve could undermine the independence of the cryptocurrency market and create a moral hazard, where investors are encouraged to take on excessive risk in the pursuit of profits.

"The creation of a government-backed bitcoin reserve would be a significant departure from the principles of the US financial system, which has long been based on the idea of private sector leadership and regulation," Representative Waters wrote. "I urge the Treasury Department to abandon this proposal and instead focus on developing a comprehensive framework for regulating the use of cryptocurrencies in the US."

The proposal to create a bitcoin reserve has been met with opposition from many lawmakers and financial experts, who argue that it could create new risks for the financial system and undermine the independence of the cryptocurrency market. The Treasury Department has not publicly commented on the proposal, but it is expected to face significant scrutiny in the coming weeks and months.