THE US Department of Housing and Urban Development (HUD) plans to use cryptocurrency and blockchain technology to monitor the employment of agency grants, which, according to some staff members, could be a “test” for a broader deployment of technology through the federal government. It is according to a report published Friday by Propublica.
The point of sale is the author of the report on the basis of a recording of a meeting and conversations with “three familiar officials with the question”, but a HUD spokesperson challenged the veracity of the report saying that it was not planned to implement such technology.
“Until now, discussions have been focused on the use of underlying technology that makes the crypto possible – the blockchain – to monitor HUD subsidies,” said the report. “Blockchain defenders argue that technology alone is precious for such purposes. But the main use of blockchain, according to experts, is for cryptographic transactions. »»
A staff member who spoke with the point of sale under the condition of anonymity has put doubts on the capacity of the plan to succeed, citing the unregulated nature of technology and the housing crisis of 2008 as proof of a need to proceed carefully.
“It is simply a question of introducing another unregulated security in the housing market as if 2008, 2009 had not happened,” the staff said at the point of sale. “I don’t see any way that will help anything. I see a lot of ways to hurt. »»
The report also indicates that the idea is defended by Irving Dennis, new financial director of HUD and principal assistant.
“Dennis, the new senior assistant financial director of the agency, is a former partner of the World Council giant Eyalso commonly known by its original name, Ernst & Young“Said the report. “Ey himself is also involved in the proposal: a business manager discussed the idea with HUD officials last month.”
But the spokesperson for Dennis and Hud, Kasey Lovett, denied the substance of the report in declarations to Propublica.
“The department does not intend to blockchain or stablecoin,” said Lovett. “Education is not the implementation.”
An EY leader aware of conversations confirmed for the point of sale that they had taken place, but after having said that he would inquire about the possibility of an interview, he did not restore contact with journalists from the point of sale.
Two meetings on the proposal would have taken place in February, according to documents examined by Propublica. A memo was later broadcast by a member of HUD staff in response to the content of the meeting knew the proposal.
“Without exaggeration, each implementation imaginable to Hud seems dangerous and ineffective,” said the memo, according to the report. Given that the ministry has no challenges to follow the grant expenses, the introduction of new technologies would not be necessary and the potential to pay beneficiaries in cryptocurrency would also introduce volatility into the financing system, added the memo.
“In subsequent discussions with HUD staff, the author of the service note described the proposal as a” bridgehead “to Hud for the introduction of cryptocurrency, that the author in relation to” monopoly “,” explained the report.
Other experts interviewed in the report were openly hostile to the concept, with Commission of securities (Dry) Corey Frayer official told Propublica that it would be “a terrible idea”. One of the reasons why he quotes is that the subsidies paid in HUD in cryptocurrency could fluctuate in value, which would have serious consequences for something like Federal Housing Administration (FHA) Insurance if you are introduced.
The mortgage has been largely curious about the potential efficiency that could come from cryptocurrency and blockchain technology for some time. THE Maintenance organization of mortgage industry standards (MISMO) In 2023 published a white paper on the subject, in particular after the regulatory housing repression in the years that followed the 2008 crisis, it tended to increase production spending.
“The use of blockchain has potential to advance the gains made in efficiency, safety and transparency and considerably reduce the manufacturing times for overall loans by at least 30% and costs of at least 25% lower than the average of the industry,” said the white paper.
But in a government environment and in an agency like HUD, which grants subsidies to vulnerable populations, introduce what some consider as an unstable element in critical assistance programs is not worth potential risks.
“Blockchain technology has been around for 15 years. Nobody wants to use it ”, Hilary Allen, professor of law at American University The WHO is studying fintech and regulatory spaces, Propublica told. “And now we have an attempt to force the government to use it.” (T) The most vulnerable (will serve) as a guinea pig. »»
