Washington’s simmering argument over a possible U.S. Bitcoin reserve boiled over this week, but the Treasury Department made one thing unmistakably clear: no taxpayer money is heading into Bitcoin.
Key Takeaways
The U.S. Treasury says it cannot and will not buy Bitcoin with taxpayer money.
Government-held Bitcoin comes only from seizures, not investment decisions.
Political pressure for a U.S. Bitcoin reserve is growing, but policy remains unchanged.
Testifying before lawmakers, Treasury Secretary Scott Bessent shut down speculation that the federal government could step in to support Bitcoin during market stress. Asked directly whether Treasury could engineer any form of backstop, Bessent said the law leaves him with no such power, describing the idea of a government rescue for Bitcoin as legally impossible.
No mandate, no backstop
The questioning, led by Representative Brad Sherman, revolved around whether regulators could quietly nudge the financial system toward Bitcoin. Sherman floated scenarios ranging from directing banks to hold BTC to adjusting reserve rules to make crypto more attractive. Each time, Bessent responded with the same message: Treasury lacks the authority to do any of it.
When the discussion veered into more speculative territory – including whether public funds could ever be placed into assets such as Bitcoin or even meme-driven tokens like TRUMP coin – Bessent again drew a hard line. Neither his role at Treasury nor his position overseeing systemic risk gives him permission to deploy public resources into crypto markets.
Seized Bitcoin is a different story
While rejecting new purchases outright, Bessent acknowledged that the U.S. government already holds Bitcoin – not by choice, but by enforcement. He explained that federal authorities retain Bitcoin seized through criminal forfeitures, treating it like any other confiscated asset.
According to Bessent, past seizures amounted to roughly $1 billion in Bitcoin, with about half initially kept by the government. As prices climbed, that retained stash ballooned in value to more than $15 billion. The gain, he stressed, came from market moves, not from any strategic bet by the Treasury.
Republicans look for workarounds
Even with Treasury’s resistance, interest in expanding U.S. exposure to Bitcoin hasn’t disappeared. Senator Cynthia Lummis continues to promote the idea of using gold reserves as a funding source for Bitcoin accumulation, arguing that such a maneuver could fit within existing executive authority. She has said the concept was discussed with Bessent previously and remains on the table from her perspective.
World Liberty Financial enters the spotlight
The hearing widened beyond Bitcoin when Representative Gregory Meeks raised concerns about World Liberty Financial. Meeks cited public comments from the firm’s founder, Eric Trump, who has claimed backing from “meaningful investors” while declining to identify them.
Meeks also referenced pressure from Senator Elizabeth Warren, who has called for scrutiny of a reported deal involving a UAE royal-linked entity. According to Meeks, the structure of the WLFI token raises red flags, including allegations that insiders control who can sell and profit, alongside reports that the token has lost more than half its value.
He urged Treasury to slow or block any Office of the Comptroller of the Currency licensing tied to World Liberty Financial, citing potential national security risks if foreign-linked investors are involved. Bessent declined the request, emphasizing that the OCC operates independently from Treasury’s direct oversight.
A clear message from Treasury
Despite the political noise, the Treasury’s position emerged intact: Bitcoin seized by law enforcement will remain on the balance sheet, but deliberate government accumulation is off the table. For now, any vision of a U.S. Bitcoin reserve appears to be a political debate – not an imminent policy shift.
