- The Trump administration has proposed using blockchain technology to monitor the funds of a new-look U.S. Agency for International Development
- The new department, provisionally called the U.S. Agency for International Humanitarian Assistance, may use blockchain to enhance security and transparency
- This initiative aims to streamline U.S. foreign aid programs, focusing on efficiency and measurable outcomes
The Trump administration has unveiled a proposal to overhaul the U.S. Agency for International Development (USAID), renaming it as the U.S. Agency for International Humanitarian Assistance (IHA) and incorporating blockchain technology to improve aid distribution transparency. This restructuring seeks to streamline foreign aid programs, emphasizing efficiency and accountability by leveraging advanced digital solutions. The plan reflects a strategic shift towards modernizing aid delivery mechanisms to ensure measurable outcomes.
New Name and New Tech?
News of the change in direction for the much-criticized USAID department came through a memo circulating among State Department staff, which was published by Politico. In the memo, the administration states that it intends to “leverage blockchain technology” as part of the agency’s procurement process, noting that “all distributions would also be secured and traced via blockchain technology to radically increase security, transparency, and traceability.”
This approach aims to encourage innovation and efficiency among implementing partners, focusing on tangible impacts rather than merely completing activities and inputs. The incorporation of blockchain technology is seen as a means to modernize aid distribution by providing a secure and immutable ledger for tracking funds and resources, something for which the technology would be ideal
Not Everyone Agrees
Proponents of using blockchain for such a purpose argue that this could reduce fraud, expedite payments to partners on the ground, and improve overall accountability within USAID. The administration believes that recording every dollar spent and every shipment dispatched on a blockchain could significantly enhance transparency.
However, some experts question the necessity and practicality of implementing blockchain in this context. Linda Raftree, a consultant who assists humanitarian organizations in adopting new technology, expressed skepticism, stating, “It feels like a fake technological solution for a problem that doesn’t exist.” She added that existing tools might already suffice for tracking aid distribution without the need for blockchain.
Trump Administration Cutting Waste
The proposal to integrate blockchain technology is part of a broader effort by the Trump administration to overhaul U.S. foreign aid programs. The administration aims to make the aid system leaner, more focused, and better positioned to counter global competitors like China, with other plans including placing the Millennium Challenge Corporation and the U.S. Trade and Development Agency under the U.S. International Development Finance Corporation. This would allow it to concentrate on promoting private sector investment in infrastructure, energy, and technology.
If blockchain technology were implemented at such scale, it would represent the biggest deployment yet of the technology and would be a vital litmus test for the potential of the movement.
