HUD Considers Using Blockchain Technology for Grant Monitoring
The US Department of Housing and Urban Development (HUD), entrusted with managing substantial aid funds and insuring mortgages worth trillions, is currently exploring the utilization of blockchain technology to track spending by grant recipients.
The potential inclusion of stablecoins as a financial instrument within the agency's operations has sparked a spirited debate, particularly in light of HUD's ongoing challenges with financial management efficiency.
A recent report by ProPublica revealed HUD's interest in harnessing blockchain, the underlying technology of cryptocurrencies, to enhance the oversight of grant allocations. A HUD official shared that the push for blockchain integration, along with stablecoins, is spearheaded by Irving Dennis, the agency's Deputy Chief Financial Officer and former EY partner. Dennis believes that adopting these technologies could significantly improve transparency and efficiency in monitoring grants, an area historically fraught with complexity and inefficiencies.
In discussing the proposal, HUD officials held several meetings, including a discussion around a "proof of concept" pilot project that would utilize blockchain to oversee funding for a grant recipient in the Office of Community Planning and Development (CPD). This initiative aims to explore potential learnings, especially in the event of the federal government's future adoption of stablecoins.
Despite the potential benefits highlighted by proponents, concerns have been raised within HUD about the introduction of blockchain and stablecoins, with some expressing fears of a repeat of the 2008-2009 financial crisis. Criticisms from a HUD employee highlighted apprehensions around introducing unregulated securities into the housing market and likened cryptocurrency to "Monopoly money," implying its potential devaluation.
Moreover, the Department of Government Efficiency (D.O.G.E.) recently shed light on internal financial challenges at HUD, casting doubt on the agency's capacity to navigate new technologies. D.O.G.E.'s findings from a software license audit disclosed significant inefficiencies in software usage, highlighting an urgent need for corrective measures.
In response to D.O.G.E.'s revelations, HUD emphasized its commitment to scrutinizing expenditure and collaborating closely with D.O.G.E. to rectify any misuse of taxpayer funds.
As of now, HUD has yet to provide any official updates on the progress of blockchain trial discussions through its X account.