Trump Admin Plans To Incorporate Blockchain Into Foreign Aid Agency's Operations

Key Takeaways

The Trump administration plans to rename and restructure USAID to incorporate blockchain technology for improved security and transparency.
Experts remain skeptical about blockchain’s necessity, suggesting existing tools could offer similar benefits without the added complexity.

The Trump administration intends to integrate blockchain technology into the procurement and distribution processes of the US Agency for International Development (USAID), which plays a key role in providing humanitarian aid and development assistance worldwide, WIRED reported Thursday, citing an internal State Department memo.

The goals are to increase security, transparency, and traceability of aid distribution while promoting innovation and focusing on measurable results, the memo indicates.

USAID has faced major disruptions due to sweeping policy changes and funding cuts since Trump’s second term started.

The Department of Government Efficiency (DOGE), led by Elon Musk, had agreed to shut down USAID, labeling it as corrupt and inefficient. This was followed by a directive barring employees from entering USAID headquarters and placing most staff on administrative leave.

Thousands of USAID employees were sent home globally, halting nearly all foreign aid programs. Contracts deemed nonessential were terminated, creating widespread uncertainty.

While some blockchain initiatives have shown promise in humanitarian work, experts express skepticism about the technology’s necessity.

Margie Cheesman, a digital anthropologist, said in her 2024 research paper that blockchain often fails to improve humanitarian projects and is primarily used as a “conjuring” tool to attract funding.

Her study of an undisclosed program revealed that blockchain added costs without tremendous benefits, with many aid workers lacking even basic knowledge of the technology.

According to a report released by Bloomberg earlier this year, Musk is exploring blockchain technology to enhance US governmental processes. His focus includes improving tracking of federal expenditures, securing data, streamlining payments, and managing government properties.

The initiative aims to modernize federal technology and curtail inefficiencies, potentially creating the largest government blockchain project in US history. DOGE’s considerations revolve around promoting transparency and reducing costs across government sectors.