HUD Explores Blockchain and Stablecoins Amid Financial Management Concerns

• The U.S. Department of Housing and Urban Development (HUD) is considering the use of blockchain technology to enhance grant oversight, amidst skepticism and internal financial challenges.

• Despite the potential benefits of blockchain, officials are wary of its implementation due to concerns about financial management and historical precedents.

• According to ProPublica, one HUD official underscored the agency’s existing difficulties by stating, “People are trying to introduce another unregulated security into the housing market as if 2008 and 2009 never happened.”

This article explores HUD’s consideration of blockchain to enhance grant oversight while highlighting the agency’s internal financial challenges and public skepticism.

HUD’s Crypto Consideration Raises Concerns of a 2008-2009 Crisis Repeat

According to ProPublica, HUD is looking to leverage blockchain—the core technology behind cryptocurrencies—to improve oversight of grant funds.

A HUD official stated that the idea of using blockchain and stablecoins is being driven by Irving Dennis, the agency’s Deputy Chief Financial Officer. Dennis, who previously worked as a partner at the global consulting firm EY, believes the technology could enhance transparency and efficiency in grant monitoring, a traditionally complex and waste-prone area.

Additionally, ProPublica reported that HUD officials held at least two meetings last month to discuss the blockchain proposal. Staff from the Office of the Chief Financial Officer (CFO) and the Office of Community Planning and Development (CPD) attended these meetings.

During the discussions, CPD explored a “proof of concept” pilot project in which blockchain would track funding for a CPD grant recipient.

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

However, ProPublica quoted a HUD employee expressing concerns: “People are trying to introduce another unregulated security into the housing market as if 2008 and 2009 never happened.” Another official compared cryptocurrency to “Monopoly money,” suggesting it could become worthless.

D.O.G.E. Highlights Internal Financial Issues at HUD

Recently, the Department of Government Efficiency (D.O.G.E.) shed light on internal financial issues at HUD, raising doubts about the agency’s capability to manage new technology. D.O.G.E. unveiled that HUD had just completed a software license audit, uncovering significant waste.

“HUD completed the same audit. Initial findings on paid software licenses: 35,855 ServiceNow licenses across three products; only using 84. 11,020 Acrobat licenses with zero users. 1,776 Cognos licenses; only using 325. 800 WestLaw Classic licenses; only using 216. 10,000 Java licenses; only using 400. All are being fixed,” stated D.O.G.E.

In response to D.O.G.E.’s findings, HUD’s official press account emphasized their commitment to scrutinizing every dollar spent and collaborating with D.O.G.E. to address the waste of taxpayer money.

As of this writing, HUD’s official X account has yet to make any announcements regarding discussions on blockchain trials.

Conclusion

While HUD’s exploration of blockchain technology presents potential benefits in enhancing grant oversight, the agency must first address its internal financial management challenges. Gaining confidence from stakeholders and ensuring effective implementation could determine the future success of these initiatives.