USAID could follow Elon Musk-led DOGE unit's idea to adopt blockchain technology under Trump aides' proposal: report

The under-fire U.S. Agency for International Development (USAID) could leverage blockchain technology to help track funds as part of a more transparent procurement process under a proposed overhaul and rebrand from Trump administration officials.

According to a document purportedly circulating in the U.S. State Department and obtained by Politico, a section of the proposal on creating "modernized, performance-based procurement" processes suggests "all distributions would be secured and traced via blockchain technology to radically increase security, transparency and traceability." However, it is not clear how exactly this would work and what type of blockchain technology would be used — be that a public, private or hybrid model.

"This approach would encourage innovation and efficiency among implementing partners and allow for more flexible and responsive programming focused on tangible impact rather than simply completing activities and inputs," the document adds.

USAID is the U.S. government agency responsible for administering foreign aid and development assistance around the world. Under recommendations from the Elon Musk-led government efficiency unit, DOGE, it is facing a slew of cuts — with critics, including President Trump, accusing USAID of wasteful spending, citing projects such as funding for diversity initiatives and tourism promotion abroad. 

In response, the Trump administration initiated a substantial restructuring of U.S. foreign aid, aiming to align it more closely with national interests, which led to a temporary freeze on USAID funding and a reduction in its workforce. However, these actions faced legal challenges, with a federal judge issuing a preliminary injunction. Supporters of the agency stressed the importance of its humanitarian work, such as providing health care and disaster relief, arguing that budget cuts could destabilize global affairs and harm U.S. interests.

The proposal describes current U.S. aid and development programs as "inefficient and fragmented," criticizing them for attempting to engage "in every sector in every country" with questionable outcomes. A better approach would be to "foster peace and stability in regions critical to U.S. interests, catalyze economic opportunities that support American businesses and consumers, and mitigate global threats such as pandemic diseases," the document states, stressing that aid programs should have end dates with their success measured carefully.

Other proposals highlighted in the document include changing USAID's name to U.S. Agency for International Humanitarian Assistance (IHA), refining its focus to issues such as global health, food security and disaster response, embedding it within the State Department and moving virtually all "politically orientated" programs the Trump administration may wish to pursue under its purview, Politico reported, making it leaner, more focused and "better positioned to take on China."

It's unclear whether Secretary of State Marco Rubio or other senior Trump officials have approved the proposal, which does not constitute any concrete plans and acknowledges that some changes may require congressional approval.

The Block reached out to the State Department for comment.

Elon Musk's DOGE also considering blockchain adoption

A rebranded USAID's potential use of blockchain in its procurement process follows Elon Musk's DOGE in also considering the adoption of the technology.

In January, Elon Musk and DOGE representatives reportedly spoke with blockchain providers while exploring options for putting federal government systems onchain, according to a Bloomberg report, though no specific blockchain networks were mentioned. 

Possible use cases include tracking federal spending, managing buildings and making payments, though talks are still in their early stages.

"All governments should track all their spending on the blockchain, an immutable public ledger," Binance founder Chengpeng Zhao said at the time. "It's called 'public spending' for a reason."