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Elon Musk wants to use blockchain to track federal spending and cut waste. However, some experts argue older systems might work better.
The plan, tied to President Donald Trump’s push for crypto-friendly policies, aims to make government finances more transparent.
Bloomberg reports that Department of Government Efficiency (DOGE) representatives, led by Musk, have met with multiple public blockchain teams to evaluate their technology for tracking federal spending, securing data, and managing government buildings.
“An internal government blockchain could be used to track spending, documents, and contracts in a way that’s fully secure and transparent,” said Sam Hammond, chief economist at the Foundation for American Innovation.
The DOGE department hasn’t decided which chain to use—or if it will create a new one. The plan is still in early stages, but analysts say it could impact crypto prices. Notably, DOGE’s nickname comes after the meme-inspired Dogecoin Musk often supports. This puts Dogecoin in the bucket of possible options.
Experts began contesting whether blockchain is the most effective solution, especially in a large-scale enterprise. Hammond questioned the necessity when databases already work and have fewer downsides. “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, ” he said.
Campbell Harvey, a finance professor at Duke University, warns about some blockchains, like Bitcoin and Solana, public nature. “One issue with the government using a public Blockchain is that they would have no control over the entries,” Harvey explained. “I think that loss of control would be a problem for governments.”
Previous attempts at large-scale blockchain adoption have faced challenges. In 2019, Gartner predicted that 90% of enterprise blockchain platforms would need replacement by 2021 to remain competitive and secure.
Despite these concerns, some government agencies have already begun experimenting with blockchain technology. The California Department of Motor Vehicles has digitized millions of car titles on the Avalanche blockchain, showing hope for successful government implementation.
The department’s blockchain exploration represents a significant step in Trump’s crypto agenda. Recently, Trump signed an order on January 23 to boost crypto innovation. This involves creating a national cryptocurrency stockpile, including Bitcoin. The framework aims to position the US as a leader in the cryptocurrency market while banning Central Bank Digital Currencies.
DOGE, established by Trump on Jan. 20, is tasked with modernizing federal technology and identifying potential spending cuts. Musk then took full control of DOGE after his co-leader quit over disagreements about how the department should be run.
Musk has promised to cut down $1-2 trillion from government spending and must present his recommendations by July 4, 2026. He has enlisted approximately 100 volunteers to write code for his various projects.
If implemented, this blockchain initiative would dwarf previous government applications of the technology, potentially transforming how federal spending is tracked and managed across agencies.
