Analyst: U.S. Government Could Save $10 Billion by Implementing Blockchain in Spending Audits

A new analysis suggests that the US government could cut more than $10 billion in audit costs over the next ten years by transitioning its $6.9 trillion annual spending onto a blockchain-based system.What are the projected benefits and challenges of moving US government spending to blockchain?According to a recent publication by The Kobeissi Letter on X, notable figures like Elon Musk and the CEO of Coinbase have advocated for the complete transition of US government expenditures to a decentralized ledger. This shift could not only secure spending but also drastically enhance transparency.The blockchain system would allow authorized browsing only, with the capability to instantly flag fraudulent activities. It is touted as nearly unhackable if managed correctly, and its public accessibility could further boost governmental transparency.Current US spending databases operate in an "append-only" format, which complicates specific data searches and obscures transparency. For instance, the Department of Government Efficiency (DOGE) recently uncovered 62 contracts tagged as "administrative expenses" totalling $182 million, which includes seemingly frivolous expenditures like a $168,000 contract for an Anthony Fauci exhibition.The Pentagon's recent audits reveal a shocking lack of accountability, failing to account for 63% of its $3.8 trillion in assets. In contrast, blockchain's inherent features, such as transaction traceability and audit automation, could revolutionize this process. Financial institutions are already adopting blockchain due to its efficacy, with 56% of cross-border businesses integrating the technology into their operations by 2024.Blockchain could also target and eliminate cases of "ghost beneficiaries," ensuring that only eligible recipients claim government aid, potentially saving billions more. In 2022, improper social security payments alone amounted to $13.6 billion.While the integration of blockchain into government spending offers substantial financial and operational benefits, it faces significant legal and bureaucratic hurdles. Resistance is likely to emerge from sectors that benefit from the current inefficiencies. Nonetheless, the potential savings and increased efficiency make a compelling case for considering this technological shift in managing government finances.