Elon Musk’s DOGE explores use of blockchain to revolutionize government spending and transparency

01/29/2025 / By Belle Carter

Elon Musk, head of the newly formed Department of Government Efficiency (DOGE), is exploring the use of blockchain technology to track and manage U.S. government expenditures, aiming to enhance transparency, secure data, streamline payments and build management.
This initiative aligns with Musk’s mission to eliminate trillions of dollars from the federal budget and ensure accountability, building on proposals like Robert F. Kennedy Jr.’s 2024 idea to put the entire federal budget on a blockchain for public scrutiny.
DOGE officially launched on Jan. 21, with the goal of modernizing federal technology and software. The department, created by an executive order from President Trump, is tasked with identifying spending cuts and delivering recommendations by July 4, 2026.
While blockchain offers potential benefits, experts warn of the complexities and challenges in applying it to a large, complex entity like the U.S. government. Issues include loss of control with public blockchains and the sufficiency of conventional databases for similar tasks.
Despite concerns, some institutions have successfully implemented blockchain for specific purposes, such as the California DMV and BlackRock. If DOGE proceeds, it would be the largest government blockchain project in U.S. history, reflecting the administration’s commitment to using advanced technology to tackle inefficiency and waste.

In a bold move to modernize federal operations and curb wasteful spending, Elon Musk, head of the newly established Department of Government Efficiency (DOGE), is reportedly exploring using blockchain technology to track and manage U.S. government expenditures.

According to sources familiar with the discussions, the initiative aims to enhance transparency, secure sensitive data, streamline payments and build management. This effort aligns with Musk’s mission to eliminate trillions of dollars from the federal budget and ensure accountability in government operations.

The discussions, which have included consultations with representatives from public blockchain networks, mark a significant step in the Trump administration’s push to integrate digital assets into federal systems. While the initiative is still in its early stages, it has already sparked debate about the feasibility and necessity of using blockchain for such large-scale government projects.

The idea of leveraging blockchain technology to increase government transparency is not new. In April 2024, former presidential candidate Robert F. Kennedy Jr. proposed putting the entire federal budget on a blockchain, allowing citizens to scrutinize every expenditure in real-time.

“Every American can look at every budget item in the entire budget, anytime they want, 24 hours a day,” Kennedy told a rally in Michigan. “We are going to have 300 million eyeballs on our budget. If somebody is spending $16,000 for a toilet seat, everybody will know about it.”

Kennedy’s proposal resonated with small-government advocates and fiscal conservatives, who have long criticized the federal government’s unchecked spending. Musk’s initiative appears to build on this momentum, with the DOGE exploring how blockchain could be used not only to track spending but also to secure data, facilitate payments and manage federal infrastructure.

DOGE takes its first steps

The DOGE officially launched its website on Jan. 21, adopting the logo of Dogecoin, the cryptocurrency that inspired its name. The move caused a brief surge in Dogecoin’s price, which rose approximately 11 percent to $0.38 following the announcement. However, the department’s mission extends far beyond memes and cryptocurrencies.

Created by an executive order signed by President Donald Trump on Jan. 20, DOGE is tasked with modernizing federal technology and software to maximize efficiency and productivity. The department is expected to work closely with the White House Office of Management and Budget to identify spending cuts and deliver recommendations by July 4, 2026.

Musk has already enlisted about 100 volunteers to write code for his projects, signaling his commitment to rapid implementation. The blockchain initiative is one of several technological tools being considered to reduce costs, eliminate fraud and address the ballooning federal deficit – a key issue Trump campaigned on in 2024.

While the potential benefits of blockchain technology are clear, experts caution that applying it to an entity as vast and complex as the U.S. government is uncharted territory. Sam Hammond, chief economist at the Foundation for American Innovation, noted that “an internal government blockchain could be used to track spending, documents and contracts in a way that’s fully secure and transparent.” However, he questioned whether blockchain is necessary for such tasks, given that conventional databases can achieve similar results with fewer complications.

Public blockchains, like those used by Bitcoin and Solana, present additional challenges. Campbell Harvey, a finance professor at Duke University, pointed out that “one issue with the government using a public blockchain is that they would have no control over the entries. I think that loss of control would be a problem for governments.”

Despite these concerns, some institutions have successfully implemented blockchain technology for specific purposes. For example, the California Department of Motor Vehicles has digitized millions of car titles on the Avalanche blockchain and BlackRock has issued a money-market fund on several cryptocurrency ledgers.

If DOGE moves forward with its blockchain initiative, it would represent the largest government project of its kind in U.S. history. The effort underscores the Trump administration’s commitment to leveraging cutting-edge technology to address longstanding issues of inefficiency and waste. (Related: Bitcoin’s bull run may extend into 2025, but regulatory shifts and market indicators suggest caution.)

However, the road ahead is fraught with challenges. Previous attempts by large corporations to implement blockchain solutions have often stalled due to governance issues and the discovery that existing database technologies are often more cost-effective.

As Hammond noted, “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.”

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