HUD Explores Blockchain for Grant Tracking Amid Financial Inefficiencies

The US Department of Housing and Urban Development (HUD) is exploring the use of blockchain technology to enhance the tracking of grant recipients' spending. This initiative comes as the agency grapples with financial mismanagement and inefficiencies in its current systems. HUD manages billions of dollars in aid and insures over a trillion dollars in mortgages, making the efficient oversight of grant funds a critical priority.

The proposal to use blockchain and stablecoins is being driven by Irving Dennis, the agency’s Deputy Chief Financial Officer. Dennis, who previously worked at the global consulting firm EY, believes that blockchain technology could significantly improve transparency and efficiency in grant monitoring. This area has historically been complex and prone to waste, making the adoption of new technologies a potential game-changer.

HUD officials have held meetings to discuss the blockchain proposal, with staff from the Office of the Chief Financial Officer (CFO) and the Office of Community Planning and Development (CPD) attending. During these discussions, a “proof of concept” pilot project was explored, where blockchain would be used to track funding for a CPD grant recipient. The goal is to assess the feasibility and benefits of blockchain technology in this context, especially as the federal government considers the adoption of stablecoins in the future.

However, the proposal has sparked debate and concerns among HUD employees. Some officials have expressed worries about introducing another unregulated security into the housing market, drawing parallels to the financial crisis of 2008-2009. Others have compared cryptocurrency to “Monopoly money,” suggesting it could become worthless. These concerns highlight the need for careful consideration and thorough evaluation of the potential risks and benefits associated with blockchain and stablecoins.

Recent revelations by the Department of Government Efficiency (D.O.G.E.) have shed light on internal financial issues at HUD, raising doubts about the agency’s ability to manage new technology effectively. D.O.G.E. uncovered severe waste in a software license audit, revealing that HUD had purchased thousands of software licenses that were barely used. For instance, HUD had 35,855 ServiceNow licenses across three products but was only using 84. Similarly, 11,020 Acrobat licenses had zero users, and 1,776 Cognos licenses were only using 325. These findings underscore the need for better financial management and oversight within