U.S. Department of Housing Explores Blockchain and Stablecoin Experiment for Grant Management

The U.S. Department of Housing and Urban Development (HUD), an agency responsible for overseeing billions in federal aid and insuring over a trillion dollars in mortgages, is exploring the possibility of integrating blockchain technology and a stablecoin into its operations. According to a meeting recording and documents reviewed by ProPublica, along with insights from three officials familiar with the discussions, HUD is considering this as an initial step toward adopting cryptocurrency.

Two of these officials suggested that the initiative could serve as a pilot for broader cryptocurrency use across federal agencies. The proposal, while still in early discussions, centers on leveraging blockchain to track HUD grants. This has sparked a mix of curiosity and concern within the agency, particularly regarding the potential for paying grant recipients in a digital currency known for its association with speculation and volatility.

The idea has been championed by Irving Dennis, HUD’s new principal deputy chief financial officer and a former partner at EY, a global consulting firm also involved in the proposal. An EY executive, Judson, joined HUD officials in a meeting last month to discuss the concept. Dennis, who previously served as HUD CFO during the first Trump administration, has long advocated for modernizing financial systems with tools like blockchain.

The current proposal involves a proof-of-concept project within HUD’s Community Planning and Development (CPD) office, which manages billions in grants for affordable housing, disaster recovery, and community infrastructure. The plan would test tracking funds for a single grant recipient, and possibly subrecipients, using blockchain’s digital ledger system, which records transactions across multiple computers for transparency and security.

Internal Concerns and Broader Considerations

Despite the enthusiasm from some quarters, the proposal has met resistance within HUD. A memo circulated after an initial meeting last month, attended by staff from the CFO’s office and CPD, described the idea as both risky and impractical. The author argued that HUD already has effective systems for monitoring grant spending, rendering blockchain unnecessary. Introducing it, the memo noted, would demand significant time, training, and resources.

In a follow-up meeting recorded and reviewed by ProPublica, CPD officials continued to voice doubts, though some saw potential in blockchain’s ability to improve data accuracy and enable real-time spending oversight. One attendee speculated that the federal government might be inching toward wider stablecoin adoption, suggesting HUD could learn from this experiment. Yet, key details remain unclear, including whether grantees would indeed receive payments in cryptocurrency.

HUD spokesperson Kasey Lovett and Dennis have pushed back against these accounts, insisting the agency has no concrete plans for blockchain or stablecoin use, framing the discussions as educational rather than actionable. Still, the proposal aligns with broader interest in blockchain among federal entities, including past explorations by the Treasury Department and others.