The United States Department of Housing and Urban Development (HUD) is exploring the use of blockchain technology, as well as cryptocurrency, in its operations. Meetings have been held about using blockchain to track grants. Officials believe it could be the start of greater use of cryptocurrency throughout the federal government.
HUD handles billions in assistance and insures over a trillion in mortgages. The possibility of integrating blockchain with stablecoins was met with mixed reactions. While others doubted its usefulness, referring to it as risky and redundant, others believe blockchain can be applied to ensure grants can be monitored more effectively.
A former EY partner, Irving Dennis, is reportedly leading the push. EY is actively involved, with executives discussing the plan with HUD. The initiative aligns with the Trump administration’s broader pro-crypto stance. The White House has scheduled a crypto summit, expecting key industry figures to attend.
Some officials worry about using crypto for major federal grants. They point to its volatility, potential for financial speculation, and association with illicit activities. Blockchain supporters say the technology itself, separate from crypto, could enhance transparency.
Internal opposition to blockchain implementation
There is a memo at HUD in opposition to the plan in strong language. The memo calls blockchain deployment at the agency inefficient and risky. The memo says HUD already tracks grants effectively and blockchain will only complicate things.
Moreover, there was a proposal for a proof-of-concept to experiment with blockchain for the tracking of a specific grant. A finance official at HUD suggested using stablecoin payments and indicated that the concept could extend across the agency, including public housing programs.
Others see advantages. They think real-time reporting and increased precision might be advantageous for the beneficiaries. Others fear it is a perilous experiment with great risks. Previous federal attempts at blockchain integration have been only partially effective.
Experts are skeptical. Others warn of the fluctuation in the value of stablecoin, which may affect government money. Others indicate blockchain is ineffective when used outside of cryptocurrency exchanges. They are concerned with the use of vulnerable groups to pilot the technology.
In light of these talks, HUD officials continue to negotiate. The involvement of EY and the support of certain government officials indicate the idea is gaining traction. Nevertheless, if implemented, it might be a turning point in how federal agencies distribute funds. The outcome of these negotiations might decide the future of crypto adoption in government operations.
