HUD Explores Blockchain, Stablecoins for Grant Tracking

The Department of Housing and Urban Development (HUD) is exploring the use of blockchain technology and potentially stablecoins to track and distribute grants. This initiative, which has sparked debate within the agency, could represent the first step toward incorporating cryptocurrency into federal government operations. The proposal is reportedly being championed by Irving Dennis, HUD’s new principal deputy chief financial officer, who previously served as HUD CFO during the first Trump administration and is a former partner at consulting firm EY.

HUD officials have held meetings to discuss implementing a blockchain system to monitor grants. The discussions have focused on creating a “proof of concept” project that would track funding to a single grant recipient using blockchain technology. Some officials at the meetings suggested the blockchain system might eventually involve paying grantees with a stablecoin, which are cryptocurrencies designed to maintain a stable value by being pegged to another asset, typically the U.S. dollar.

Critics within the department have raised serious concerns about the proposal. One official authored a memo describing the idea as “dangerous and inefficient” and compared cryptocurrency to “monopoly money.” Critics worry about introducing unregulated digital assets into federal housing programs, citing the potential risks and volatility associated with cryptocurrencies. External experts have also expressed skepticism, with some calling it “a terrible idea” and warning about potential value fluctuations even with stablecoins.

Despite these concerns, some officials see potential benefits in using blockchain technology. Certain meeting attendees suggested that blockchain could reduce inaccurate data from grant recipients and enable real-time monitoring of their spending. A finance official at one meeting indicated plans to expand the blockchain system beyond the Community Planning and Development office, which oversees billions in grants for affordable housing, homeless shelters, and disaster recovery. The official mentioned that HUD is also considering implementing the technology in the Office of Public and Indian Housing, which serves millions of people in public and federally subsidized housing.

HUD spokesperson Kasey Lovett has denied that the department has concrete plans to implement blockchain or stablecoin systems, stating that “education is not implementation.” However, the consideration of blockchain technology at HUD aligns with the broader cryptocurrency-friendly stance of the Trump administration. The administration has appointed industry supporters to lead federal agencies and created a “strategic Bitcoin reserve.”

Treasury Secretary Scott Bessent stated at a White House Crypto Summit that the government would “put