In 2025, a memo surfaced detailing plans for the United States Agency for International Development (USAID) to explore and implement blockchain technology. This initiative, originating during the Trump administration, aimed to leverage the perceived benefits of blockchain for various USAID projects. However, the proposal was met with skepticism from experts who questioned the technology's suitability and necessity for the challenges USAID typically addresses. The Promise of Blockchain for USAID The memo touted blockchain's potential to enhance transparency, security, and efficiency in USAID's operations. Proponents suggested that blockchain could improve supply chain management, track aid distribution, and reduce corruption. The immutable and decentralized nature of blockchain was seen as a way to build trust and accountability in complex international development projects. Specifically, the envisioned applications included using blockchain to verify the delivery of goods and services, ensuring that aid reaches its intended recipients. It was also proposed to use blockchain for land registry in developing countries, providing secure and transparent records of ownership. Furthermore, blockchain-based identity management systems were considered to streamline beneficiary verification and reduce fraud. Skepticism and Concerns Despite the potential benefits, the initiative faced considerable criticism. One expert, quoted in a Wired article, described the plan as “a fake technological solution for a problem that doesn’t exist.” Critics argued that blockchain was being applied without a clear understanding of the actual problems USAID faced and that simpler, more established technologies could be more effective and cost-efficient. Concerns were also raised about the complexity and scalability of blockchain technology. Implementing and maintaining blockchain systems in developing countries with limited infrastructure and technical expertise could prove challenging. Moreover, the energy consumption of some blockchain networks was seen as a potential environmental concern. The Future of Blockchain at USAID While the initial enthusiasm for blockchain within USAID may have waned, the agency continues to explore the technology's potential in specific contexts. Pilot projects have been launched to test the feasibility of blockchain for various applications, such as tracking humanitarian aid and improving supply chain transparency. The long-term success of these initiatives will depend on careful planning, realistic expectations, and a focus on addressing real-world problems. Ultimately, the integration of blockchain technology into USAID's operations requires a balanced approach. While blockchain offers potential benefits, it is not a panacea. A thorough understanding of the technology's limitations and a focus on practical applications are essential for ensuring that blockchain contributes to USAID's mission of promoting sustainable development and humanitarian assistance.
