HUD Explores Blockchain Solutions for Grant Oversight Amid Financial Challenges

The US Department of Housing and Urban Development (HUD), which oversees billions in aid and guarantees trillions in mortgages, is looking into the use of blockchain technology to enhance monitoring of grant expenditures.

In addition to blockchain, the agency is contemplating the incorporation of stablecoins into its financial systems. This initiative has ignited a heated debate, particularly as HUD grapples with issues related to financial management and efficiency.

Risks of Repeating Past Financial Crises

As reported by ProPublica, HUD is considering leveraging blockchain—the underlying technology of cryptocurrencies—to improve the oversight and transparency of grant funds. Irving Dennis, the Deputy Chief Financial Officer at HUD, is a prominent advocate for this technology. With a background as a consultant at EY, Dennis believes that blockchain could rectify historical inefficiencies and prevent waste in grant allocation.

ProPublica also indicated that HUD officials conducted multiple meetings last month to deliberate on the blockchain initiative, with participation from staff members from both the Office of the Chief Financial Officer and the Office of Community Planning and Development. Among the discussed proposals was a 'proof of concept' pilot project aimed at using blockchain to oversee funding for specific grant recipients.

One official remarked, “We might learn something from this, especially if the federal government is moving toward stablecoin adoption in the future.”

Nonetheless, not everyone at HUD is convinced. Some employees voiced concerns regarding the potential for introducing unregulated securities to the housing market, drawing parallels to the financial crisis of 2008-2009. Comparisons were also made between cryptocurrency and 'Monopoly money,' suggesting it may ultimately prove valueless.

D.O.G.E. Highlights Financial Management Concerns

The Department of Government Efficiency (D.O.G.E.) has recently pointed out significant internal financial management issues at HUD, raising questions about the agency's capacity to implement new technological solutions. D.O.G.E. completed a software license audit that uncovered substantial inefficiencies and waste.

According to their audit, HUD reported having 35,855 ServiceNow licenses, but only 84 were in use, along with 11,020 unused Acrobat licenses and many more underutilized software products. These issues are currently being addressed by the agency.

In response to the findings, HUD’s official press account communicated that the agency is thoroughly reviewing its expenditure and collaborating with D.O.G.E. to mitigate taxpayer money waste.

As of now, HUD has not publicly commented on the status of the blockchain pilot discussions on their official social media channels.