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Donald Trump’s tech bro buddy Elon Musk is reportedly considering how to use blockchain to cut bloat in government. And it’s far from a bad idea.
Blockchain is seen by many as a solution without a problem. There have been plenty of trials of the public-facing, decentralised database for tracking payments or shipments, though fewer instances of long-term use. That means the focus to date largely remains on cryptocurrencies and financial transactions, though there are exceptions — as we discovered when we talked to a French startup using blockchain to train medical AI.
Now Musk is reportedly talking up blockchain as a tool for cost cutting and fraud avoidance in the US government, in particular at the US Department of Treasury, as well as for managing data and even buildings. The work is part of cutbacks led by Musk’s Department of Government Efficiency (DOGE) – with a name like that, it’s no surprise blockchain is under consideration.
(The move comes alongside Trump heavily backing AI as well as cryptocurrencies, including releasing his own meme coin, as has his wife, Melania. How things change: only three years ago, Trump said cryptocurrencies such as bitcoin were a scam.)
If Musk gets his way, this could become the biggest blockchain trial yet.
Start talking about blockchain and its utility, and Walmart is the example industry watchers will enthusiastically point to – and with good reason, as it’s a massive organisation that’s found multiple uses for the technology, from supply-chain management to managing payments to partners.
But beyond Walmart, there are a few reasons for pilots haven’t moved into full production. Early trials used systems that weren’t quite ready yet; organisations weren’t as well run as Walmart; or the technology simply wasn’t the right answer.
For example, several trials opted for a private version of blockchain. In that case, a database could be an easier, simpler answer than breaking new ground with a distributed blockchain-based system.
Sam Hammond, Chief Economist at the Foundation for American Innovation, told Fortune that an internal blockchain could be useful to track spending, documents and contracts in a more transparent way, but added: “the question is whether you really need a blockchain to do that, since conventional databases can be used in a similar way and with fewer downsides”.
That said, the state of California has also used blockchain at its Department of Motor Vehicles for app-based vehicle title transfers, suggesting the technology could find success in government operations, even if only for small, public facing processes.
The reports about DOGE’s plans suggest blockchain has been considered for a wide range of uses, including fraud prevention, data security, building management and cost cutting. Members of that organisation have already met with multiple blockchain providers.
Small trials of blockchain to solve specific problems – as California’s DMV has done – could prove a small step towards modernising government in a transparent, innovative way, but a massive, fast-moving rollout of an untested technology could prove harder to get right.
While it’s still unclear exactly how blockchain would be used to help the US government, Musk has been clear about cracking down on spending at the Treasury department, making extreme, unproven statements suggesting blockchain could be tasked with fighting criminal behavior rather than just outdated bureaucracy.
Musk posted to his social media site X: “Career Treasury officials are breaking the law every hour of every day by approving payments that are fraudulent or do not match the funding laws passed by Congress. This needs to stop now!” Asked by a follower if blockchain could be the answer, Musk responded: “Yes!”
That statement follows DOGE and Musk being given access to a sensitive Treasury payments system, which handles everything from Social Security to money doled out by Congress, including defence contracts to companies that are rivals to Musk’s own, noted one report.
That access has since been challenged via a lawsuit, one of many that have hit DOGE since Trump’s inauguration. Perhaps DOGE could start a blockchain to manage all the legal challenges faced by the agency?
