The U.S. Department of Housing and Urban Development is considering integrating blockchain technology, according to a report by ProPublica.
The U.S. Department of Housing and Urban Development (HUD) manages over $50 billion a year for housing projects, urban development, and social programs. In addition, approximately 4 million households receive rental subsidies or social housing through HUD programs. The amount of mortgages insured by HUD, which enables many Americans to buy their own homes, is even larger. This is $1.3 trillion. Given the amount of public money, the aim is to increase efficiency and better monitor how the funds are being used. Since Elon Musk’s DOGE is already busy scouring the U.S. administration’s apparatus to save costs, the HUD wants to improve its use by using blockchain.
One of the department’s main ideas is to use blockchain technology to track HUD grants. Specifically, a “proof of concept” project is to be launched in which a single grant recipient and possibly sub-recipients are tracked on the blockchain. Proponents argue that this could lead to greater transparency and efficient use of funds.
Another scenario is the use of a stablecoin to pay out grants. A cryptocurrency pegged to the US dollar is to be used to enable faster and more direct payments to grant recipients. However, it is still unclear whether this will actually be implemented, as stablecoins are still viewed critically from a regulatory perspective. However, this is likely to change with the Trump administration. During the election campaign, Trump promised to make the USA the crypto capital of the world. Because he kept his word on the Bitcoin reserve, he and his team are likely to make an effort here too.
However, the discussions within the ministry are controversial. While some officials hope that blockchain will provide better control and real-time monitoring of financial flows, critics fear that the technology, which has not been tested in this environment, creates new risks. One particular fact is that false or manipulated data could be irreversibly stored on the blockchain. In this sense, blockchain improves the durability of records, but cannot contribute anything to the quality of input from authorities and ministries. There is also a risk that stablecoins, if linked to HUD mortgage programs, could destabilize the housing market.
The project is being driven primarily by Irving Dennis, the ministry’s deputy chief financial officer. Dennis was previously a partner at Ernst & Young, one of the largest global management consultancies, which itself works on blockchain solutions. EY managers are said to have already discussed the concept with HUD representatives.
Critics point out that blockchain technology has hardly been successfully implemented outside the crypto sector and that it is unclear what added value it can actually offer in funding management. Nevertheless, the discussion continues, also because the Trump White House has a direct interest in the topic.
Image by gedankenlust from Pixabay
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