ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.
The U.S. Department of Housing and Urban Development is considering taking a first step to using cryptocurrency, according to a meeting recording and other materials reviewed by ProPublica and three officials familiar with the matter. Two officials told ProPublica they believe the initiative may be a trial run for the use of crypto across the federal government.
The discussions have sparked concern among some at the department, especially about the prospect of paying recipients of major federal grants in cryptocurrency, an uninsured digital asset associated with financial speculation, dramatic swings in value and transnational crime.
The focus of the discussions so far has been experimenting with using the underlying technology that makes crypto possible — the blockchain — to monitor HUD grants. Blockchain advocates argue that the technology is valuable on its own for such purposes. But the primary use of blockchain, according to experts, is for crypto transactions.
“It’s just introducing another unregulated security into the housing market as though 2008, 2009 didn’t happen,” one HUD staffer said, referring to the subprime mortgage crisis. “I don’t see any way this will help anything. I see a lot of ways this could hurt,” said the official, who, like others in this article, spoke on the condition of anonymity for fear of retribution. The HUD discussions have covered the potential use of a stablecoin, a form of crypto that is pegged to another asset to avoid wild swings in value, although such swings have happened in the past.
The blockchain idea is being pushed, a HUD official told colleagues, by Irving Dennis. Dennis, the agency’s new principal deputy chief financial officer, is a former partner at the global consulting giant EY, also commonly known by its original name, Ernst & Young. EY itself is involved in the proposal as well: An executive of the firm discussed the idea with HUD officials last month.
What We’re Watching
During Donald Trump’s second presidency, ProPublica will focus on the areas most in need of scrutiny. Here are some of the issues our reporters will be watching — and how to get in touch with them securely.
Sharon Lerner
I cover health and the environment and the agencies that govern them, including the Environmental Protection Agency.
Jesse Coburn
I’m tracking how the Trump administration reshapes policy at the Department of Housing and Urban Development and the Department of Transportation.
Mark Olalde
I’m interested in Trump’s and his allies’ promises to dismantle the federal bureaucracy and laws that protect the environment.
Maryam Jameel
I’m an engagement reporter interested in immigration, labor and the federal workforce.
If you don’t have a specific tip or story in mind, we could still use your help. Sign up to be a member of our federal worker source network to stay in touch.
We’re trying something new. Was it helpful?
The crypto industry has found an ally in President Donald Trump, whose administration has tapped industry boosters to lead federal agencies, backed off investigations into crypto firms and created a “strategic Bitcoin reserve.” (Bitcoin plunged $5,000 within an hour of the news of the reserve’s opening on Thursday.) Trump himself has significant financial interests in crypto. On Friday, the White House is scheduled to host a “crypto summit” with leading figures from the industry.
The proposal at HUD indicates a new way that the administration may seek to bolster the industry: by incorporating blockchain and possibly cryptocurrency into the routine spending and accounting practices of federal agencies. It’s a move that would align with the apparent desire of Trump adviser Elon Musk to use the blockchain to monitor federal spending.
Dennis and HUD spokesperson Kasey Lovett both denied the accounts of their colleagues. “The department has no plans for blockchain or stablecoin,” Lovett said.
