The Trump Administration Wants USAID on the Blockchain

According to a memo circulating among State Department staff and reviewed by WIRED, the Trump administration plans to rename the United States Agency for International Development (USAID) as US International Humanitarian Assistance (IHA), and to bring it directly under the secretary of state. The document, on which Politico first reported, states that as part of its reorganization, the agency will “leverage blockchain technology” as part of its procurement process.

“All distributions would also be secured and traced via blockchain technology to radically increase security, transparency, and traceability,” the memo reads. “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 memo does not make clear what specifically this means—if it would encompass doing cash transfers in some kind of cryptocurrency or stablecoin, for example, or simply mean using a blockchain ledger to track aid disbursement.

The memo comes as staffers at USAID are trying to understand their future. The agency was an early target of the so-called Department of Government Efficiency (DOGE), which has effectively been headed by centibillionaire Elon Musk. Shortly after President Trump’s inauguration, the State Department put the entire agency’s staff on administrative leave, slashed its workforce, and halted a portion of payments to partner organizations around the world, including those doing lifesaving work. Since then a federal judge has issued a preliminary injunction against the dismantling of the agency, but the memo appears to indicate that the administration has plans to continue its mission of drastically cutting USAID and fully folding it into the State Department.

The plans for the blockchain have also caught staffers off guard.

Few blockchain-based projects have managed to achieve large-scale use in the humanitarian sector. Linda Raftree, a consultant who helps humanitarian organizations adopt new technology, says there’s a reason for that—the incorporation of blockchain technology is often unnecessary.

“It feels like a fake technological solution for a problem that doesn’t exist,” she says. “I don’t think we were ever able to find an instance where people were using blockchain where they couldn’t use existing tools.”

Giulio Coppi, a senior humanitarian officer at the nonprofit Access Now who has researched the use of blockchain in humanitarian work, says that blockchain technologies, while sometimes effective, offer no obvious advantages over other tools organizations could use, such as an existing payments system or another database tool. “There’s no proven advantage that it’s cheaper or better,” he says. “The way it’s been presented is this tech solutionist approach that has been proven over and over again to not have any substantial impact in reality.”

There have been, however, some successful instances of using blockchain technology in the humanitarian sector. In 2022, the United Nations High Commissioner for Refugees (UNHCR) ran a small pilot to give cash assistance to Ukrainians displaced by the Russia-Ukraine war in a stablecoin. Other pilots have been tested in Kenya by the Kenya Red Cross Society. The International Committee of the Red Cross, which works with the Kenya team, also helped to develop the Humanitarian Token Solution (HTS).