Hearing Highlights: Can the Government Bail Out Bitcoin with Taxpayer Money?
During a House Financial Services Committee hearing on Wednesday, Treasury Secretary Scott Bessent presented the Financial Stability Oversight Council's annual report on emerging economic risks. Representative Brad Sherman (D-CA) pressed Bessent on whether the U.S. government could intervene to 'bail out' bitcoin in a market crash, referencing the 2008 financial crisis where bailouts protected powerful institutions. Sherman asked if Treasury could direct banks to buy BTC or modify banking rules to encourage crypto holdings.
Bessent flatly rejected the premise: 'I am Secretary of the Treasury. I do not have the authority to do that.' He added that neither Treasury nor his role as chair of the Economic Stability Oversight Council gives him power to order banks to invest in BTC or allocate public funds to crypto assets. Sherman attempted to clarify whether taxpayer money under Treasury management could ever be deployed into BTC, but Bessent emphasized that the government's current BTC exposure comes only through law enforcement seizures, not investment decisions.
Seized Bitcoin Appreciation: From $500 Million to $15 Billion
Bessent provided a striking example: approximately $500 million in retained BTC from past seizures later grew to more than $15 billion in value, underscoring bitcoin's potential upside even as policymakers remain skeptical of direct government involvement. 'We are retaining seized bitcoin. That is an asset of the U.S.,' he said. The exchange ended when the committee chair cut Sherman off after his allotted time expired.
U.S. Will Stop Selling Bitcoin and Add to Strategic Reserve
Earlier this year at the World Economic Forum in Davos, Bessent stated that the U.S. government's stance is to stop selling seized BTC and instead add it to the Strategic Bitcoin Reserve. He framed the move as part of a broader push to bring digital-asset innovation back to the U.S. These comments came amid questions over BTC seizures tied to cases involving Tornado Cash and Samourai Wallet developers.
While declining to discuss active litigation, Bessent stressed that seized BTC will be retained by the federal government once legal damages are resolved. Any selling of BTC would contradict Executive Order 14233, which requires forfeited bitcoin to be held in the U.S. Strategic Bitcoin Reserve rather than liquidated. This policy shift marks a significant change in the U.S. government's approach to cryptocurrency assets.