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On March 21, 2025, reports emerged that the Trump administration is eyeing a significant overhaul of the United States Agency for International Development (%USAID), including a proposal to integrate %Blockchain technology into its procurement processes. This initiative, detailed in a 13-page memo circulating among State Department staff, aims to enhance security, transparency, and traceability in the distribution of U.S. foreign aid. The move reflects a broader push by the administration to modernize government operations and align them with national interests, though it has sparked both enthusiasm and skepticism among experts and stakeholders.

The proposal, first reported by Politico and later elaborated on by outlets like WIRED and CoinDesk, outlines a restructured USAID tentatively rebranded as the U.S. International Humanitarian Assistance (IHA). This new entity would fall directly under the Secretary of State’s authority, a shift from its current semi-autonomous status. Alongside this organizational change, the administration plans to leverage blockchain technology to revolutionize how USAID manages its procurement and aid distribution.

According to the memo, “All distributions would also be secured and traced via blockchain technology to radically increase security, transparency, and traceability.” The goal is to create a performance-based system that ties funding to measurable outcomes rather than inputs, ensuring taxpayer dollars deliver maximum impact. This approach, the document argues, would encourage innovation and efficiency among implementing partners while allowing for more flexible and responsive programming.

Blockchain, a decentralized digital ledger technology best known for underpinning cryptocurrencies like %Bitcoin (CRYPTO: $BTC ), offers a tamper-proof way to record transactions and track assets. In the context of USAID, proponents suggest it could provide real-time visibility into how aid funds are spent and delivered, reducing fraud and administrative overhead. By logging every dollar and shipment on an immutable ledger, the system could allow donors, recipients, and oversight bodies to verify allocations instantly—a stark contrast to the paper-based audits and manual tracking often used today.

The administration’s interest in blockchain aligns with broader crypto-friendly signals from President Trump’s team. Just days earlier, Trump addressed the Digital Assets Summit virtually, urging Congress to pass stablecoin regulations, while his Department of Government Efficiency (DOGE), led by Elon Musk, has explored blockchain for various government applications. This USAID proposal could mark one of the largest government blockchain projects in U.S. history, potentially setting a precedent for other federal agencies.

However, the memo leaves key details unclear. It does not specify whether blockchain implementation would involve %Cryptocurrencies or stablecoins for aid payments or simply use a ledger to track traditional cash flows. This ambiguity has fueled debate about the practicality and necessity of the plan.

Supporters see blockchain as a transformative tool for humanitarian aid. Past pilot projects, like the United Nations High Commissioner for Refugees’ 2022 stablecoin distribution to displaced Ukrainians, have demonstrated its potential to speed up transfers and improve accountability. An NGO representative familiar with blockchain noted that stablecoins can sometimes outpace traditional methods in disaster zones, offering a lifeline where banking infrastructure is lacking.

Yet critics question whether blockchain is the right fit for USAID’s challenges. Linda Raftree, a consultant specializing in tech for humanitarian groups, told WIRED, “It feels like a fake technological solution for a problem that doesn’t exist.” She and others argue that existing tools—databases, payment systems, and audits—could achieve similar transparency without the added complexity and cost of blockchain. Giulio Coppi from Access Now echoed this sentiment, suggesting that the technology’s benefits over conventional alternatives remain unproven in this context.

Practical hurdles also loom large. Implementing blockchain across USAID’s global operations would require robust digital infrastructure, reliable internet access, and extensive training for field staff—challenges in the remote and conflict-ridden areas where aid is often delivered. Smaller NGOs, which form the backbone of many USAID partnerships, could struggle with the technical burden, potentially widening gaps between large and local organizations.

The blockchain proposal comes amid significant upheaval at USAID. Since Trump’s second term began, the agency has faced workforce cuts, administrative leave for thousands of staff, and a temporary freeze on payments to partners—moves driven by DOGE’s efficiency mandate. A federal judge’s injunction has slowed some of these changes, but the memo signals the administration’s intent to press forward with a leaner, more focused USAID. The document critiques current aid programs as “inefficient and fragmented,” proposing a narrower scope targeting U.S. priorities like countering China, promoting stability, and addressing global threats such as pandemics.

This aligns with Trump’s broader pro-crypto stance, including plans for a Strategic Bitcoin Reserve and regulatory clarity for digital assets. If successful, the USAID initiative could bolster the case for blockchain across government, from tracking federal expenditures to managing public services.

Despite the optimism, the path to implementation is fraught with obstacles. Legal challenges, congressional approval, and stakeholder buy-in will be critical. USAID staffers have expressed concerns about the rigidity of outcome-based funding in volatile environments, where flexibility is often key. Meanwhile, the lack of a clear timeline or technical blueprint in the memo raises questions about feasibility.