USAID to Use Blockchain as Trump Moves Agency to State Dept.

• USAID will be rebranded and integrated into the State Department with blockchain oversight.
• Experts question blockchain’s effectiveness for humanitarian aid, citing added costs and complexity.
• SEC nominee Paul Atkins, a digital assets supporter, will face a Senate hearing on March 27.

The Trump administration is planning major changes to the United States Agency for International Development. According to a memo, USAID will be renamed as the US International Humanitarian Assistance and moved directly under the secretary of state. The memo also states the agency will adopt blockchain technology to manage its procurement process.

The plan aims to use blockchain to track aid distributions securely and transparently. The document claims this will increase efficiency and flexibility for organizations managing humanitarian aid projects. However, the memo does not specify how blockchain will be implemented. It is still unclear if this includes cash transfers in cryptocurrency or simply using blockchain ledgers to trace transactions.

The reorganization follows years of cuts to USAID’s workforce and funding. After President Trump’s inauguration, the State Department placed staff on administrative leave and suspended payments to partner organizations. A federal judge issued a preliminary injunction to block further dismantling of the agency. Yet, the new memo suggests the administration will continue pushing to fully integrate USAID into the State Department.

The blockchain proposal has surprised many inside USAID. Experts remain skeptical about blockchain’s advantages in the humanitarian sector. Linda Raftree, a technology consultant for aid groups, says blockchain is often unnecessary. “It feels like a fake technological solution for a problem that doesn’t exist,” Raftree said.

Giulio Coppi, a senior humanitarian officer at Access Now, agrees. He says other tools could meet USAID’s needs without added complexity. “There’s no proven advantage that it’s cheaper or better,” Coppi said.

Related: Trump Becomes First President To Speak At Digital Assets Summit

Nonetheless, there are examples of blockchain working in aid distribution. The UNHCR tested a pilot program in 2022, providing displaced Ukrainians with cash assistance in stablecoins. The Kenya Red Cross and the International Committee of the Red Cross also developed blockchain-based solutions.

Some NGOs have found benefits in blockchain. A representative from one NGO says stablecoins can be faster for disaster response. However, they also mention blockchain systems can increase costs for smaller NGOs.

The memo also suggests stricter funding conditions, stating that payments will depend on project outcomes. A USAID employee says this approach could reduce flexibility in volatile situations like conflict zones. Critics say these changes align with claims from Musk and the administration about corruption within USAID.

Meanwhile, Paul Atkins, SEC chair nominee and digital assets supporter, will testify before the Senate Banking Committee on March 27. If approved, Atkins could assume his role as early as next month. Jonathan Gould and Luke Pettit will also attend the hearing for confirmation to other senior financial positions.

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