Treasury Draws Firm Line as Bitcoin Reserve Debate Roils Capitol Hill

The U.S. Treasury faced sharp questions Tuesday over Bitcoin policy during a tense Capitol Hill hearing. Lawmakers focused on whether the government should purchase Bitcoin or allow federal assets to back crypto. Treasury Secretary Scott Bessent firmly stated that taxpayer funds would not be used to buy or support digital currencies.

Treasury Blocks Bitcoin Intervention Despite Pressure

During a House Financial Services Committee hearing, Rep. Brad Sherman pressed Bessent about potential Bitcoin-related bailouts. Sherman suggested the Treasury could direct banks to hold Bitcoin or tweak reserve policies to support crypto. However, Bessent responded that the law gives him no such authority, and he cannot compel banks to make crypto purchases.

Bessent further clarified that taxpayer funds cannot be invested in digital currencies or in any tokens, including Solana-based meme assets. He emphasized that his role under current regulations does not permit using federal funds for Bitcoin exposure. Sherman countered by raising concerns over private banking funds, but Bessent maintained that those are not public monies.

The exchange intensified when Sherman questioned if the government would ever use tax revenue to accumulate Bitcoin reserves. Bessent reiterated that only seized Bitcoin is held by the U.S. government under existing forfeiture processes. He cited prior seizures totaling $1 billion, with $500 million retained and now worth over $15 billion.

TRUMP Coin Draws Fire During Crypto Oversight Talks

Rep. Sherman also referenced the “TRUMP” meme coin issued on the Solana blockchain, linking it to speculation and volatility. He asked if such coins could ever qualify for government-backed purchases or policy inclusion. Bessent replied that neither the Treasury nor the FSOC has the authority to act on speculative meme coins.

While Bessent stayed neutral on the TRUMP coin, Sherman emphasized its unregulated nature and alleged political branding. He warned that using public resources for these assets could set a dangerous precedent. The discussion signaled growing discomfort among lawmakers about crypto products perceived to be linked to public figures.

Bessent declined to provide specific commentary on TRUMP coin but reinforced that the Treasury does not engage in speculative crypto activities. He stood by the department’s position that taxpayer dollars should not enter volatile or unregulated digital markets. This stance continues to define Treasury policy amid rising political attention on meme coins.

World Liberty Financial Raises Scrutiny Over Security Risks

Rep. Gregory Meeks shifted focus to World Liberty Financial, citing concerns about foreign ties and investor transparency. He referenced statements from founder Eric Trump, who claimed he had undisclosed yet “meaningful” investors. Meeks argued that such ambiguity could pose national security risks, especially if linked to foreign capital.

The lawmaker also pointed out that the WLFI token had lost over 50% of its value, adding to concerns of instability. He said discussion forums revealed unease about governance, suggesting that the Trump family controlled key decisions. Meeks argued this ownership structure could allow selective profit-taking from token sales.

Senator Elizabeth Warren had previously called for an investigation into a deal involving a UAE royal entity and World Liberty Financial. Meeks followed up by urging tighter oversight of any bank license applications tied to the firm. However, Bessent refused to intervene, stating that the Office of the Comptroller of the Currency operates independently.

https://www.cryptobreaking.com/treasury-draws-firm-line-as/?utm_source=blogger%20&utm_medium=social_auto&utm_campaign=Treasury%20Draws%20Firm%20Line%20as%20Bitcoin%20Reserve%20Debate%20Roils%20Capitol%20Hill%20