Musk wields the DOGE "machete" and considers moving the US Treasury to the blockchain. Which chain is expected to stand out?

Author: Weilin, PANews

On February 13, the website of the Department of Government Efficiency (DOGE) was officially launched to publish details and evidence of government cost reductions, marking the latest progress of the department in reducing US government costs. As of the afternoon of February 13, according to doge-tracker data (data compiled from DOGE Twitter), Musk's Department of Government Efficiency has saved US taxpayers $37.89 billion, which only accounts for 1.9% of Musk's goal of reducing US government spending by $2 trillion.

On February 9, Coinbase CEO called for greater transparency in government spending through blockchain technology. "Great progress, DOGE," Brian Armstrong wrote in a February 9 post on the X platform. "Imagine if every government expenditure could be transparently made on-chain, that would make auditing much easier." On February 10, Cathie Wood, founder of asset management firm Ark Invest, also supported Musk's idea of putting all U.S. government spending on the blockchain, commenting that "transparency, efficiency, and security: win-win, win-win, win-win."

DOGE is considering using blockchain technology to reduce government costs

According to a report by Bloomberg in late January, DOGE is considering using blockchain technology to reduce government costs, and people familiar with the matter revealed that relevant internal discussions are underway. If DOGE launches a plan, the scale of the plan will be large and may be adopted in multiple government departments.

Bloomberg reported, citing people familiar with the matter, that in the discussion, some people mentioned using blockchain to track federal spending, protect data, make payments, and even manage buildings. A person familiar with the matter said that people related to DOGE have met with representatives of multiple public blockchain networks to evaluate the technology. A person who went to Palm Beach, Florida, in December last year proposed several blockchain applications to officials of the Trump transition team, focusing on the technology's potential in protecting important government data and tracking the flow of funds.

On February 3, Musk shared his thoughts on putting U.S. Treasury transactions on the blockchain. In a question post on the X platform, Musk responded with an emphatic “Yes!”

The Department of Government Efficiency was formally created by an executive order signed by President Trump on January 20, and is responsible for modernizing federal technology and software to maximize government efficiency and productivity. Trump said the department will work with the White House Office of Management and Budget to identify spending cuts and provide recommendations by July 4, 2026.

Its leader is entrepreneur Musk. Vivek Ramaswamy was originally scheduled to lead with Musk, but Vivek withdrew for some reason before the official appointment. DOGE has an office in the Eisenhower Executive Office Building and has about 20 employees. A person familiar with the matter said that Musk recruited about 100 volunteers to write code for his project before Trump took office.

Musk has pushed for the use of blockchain technology to force transparency in government, but he is not the first to come up with the idea. In April 2024, former U.S. presidential candidate Robert F. Kennedy Jr. said he wanted to put the entire federal budget on a blockchain. "Every American will be able to see every line item in the entire budget at any time, 24 hours a day," the politician told an audience at a rally in Michigan. "We will have 300 million eyes on our budget. If someone spends $16,000 on a toilet seat, everyone will know about it."

Kennedy's proposal had been widely supported by advocates of small government and sound money, who believed that U.S. government spending was out of control.

Which blockchain network is expected to gain favor?

Jean Rausis, co-founder of decentralized finance platform Smardex, said Musk's proposal to move the U.S. Treasury to a blockchain could make the U.S. "the de facto global leader in blockchain innovation." "While it's hard to say which blockchain would be up to the task, it's important that it be permissionless. Otherwise, the transparency promised will be empty talk. However, if the U.S. Treasury embraces decentralized infrastructure, this could be the catalyst for the Web2 and Web3 worlds to begin to merge."

After the Bloomberg report was released, Cardano founder Charles Hoskinson immediately said on X, “I think this task should be accomplished by Cardano, Bitcoin and Midnight. Hey, DOGE master Musk, come to us, we will help for free.”

On January 26, Haseeb Qureshi, managing partner of Dragonfly, predicted that the U.S. Government Accountability Office (GAO) may launch an AVAX subchain in 2025 to report public spending, with all spending traceable on the chain through stablecoins. The wallets of government agencies and contractors are made public and analyzed by public data detectives every day.

Currently, there are use cases on Avalanche. On July 30 last year, the California Department of Motor Vehicles had digitized 42 million car title certificates on the Avalanche blockchain to detect fraud and simplify the ownership transfer process.

In addition, Ava Labs (the company behind the Avalanche blockchain) has partnered with Deloitte and the Federal Emergency Management Agency (FEMA) to launch a new disaster assistance platform to help the US government streamline disaster compensation applications submitted to FEMA.

The idea of applying blockchain to large-scale projects is not new, although applying it to large entities like the U.S. government remains an unproven concept. As early as 2022, the U.S. General Services Administration (GSA) was studying the introduction of ledger systems such as blockchain into everyday federal government use under its Government IT Program. The agency held the U.S. Federal Blockchain Forum in 2017 and is studying how smart contracts can be used in patents, trademarks, IT purposes, and foreign aid delivery. According to public reports in 2022, the Delaware Blockchain Initiative has also explored blockchain technology in public record organizations and private sector data security.

In addition to Cardano and Avalanche mentioned above, on January 28, the price of Movement Labs' MOVE token rose significantly, and there were rumors that the company was consulting for Musk's DOGE. The modular network has reportedly contacted the organization, although the news has not been confirmed. Soon after, Rushi Manche, the founder of Movement Labs, posted on X in response to the news that World Liberty Financial bought a large amount of MOVE, saying: "Strategic Move Reserve. We are proud to be the first altcoin, the first modern blockchain platform, and the first alternative virtual machine under the leadership of the new government. MOVE is made in the United States."

In addition, the Trump family project World Liberty Financial recently announced its cooperation with Ondo Finance. Ondo Finance launched the institutional-oriented Layer 1 blockchain Ondo Chain, but this cooperation is mainly aimed at the RWA track.

As of the afternoon of February 13, judging from the World Liberty Financial holdings on Arkham Intelligence, in addition to ONDO and MOVE, the project also holds a large amount of ETH. As the deployment network for the presidential family project, Ethereum may also have a certain first-mover advantage in cooperation with the government.

What challenges will the US government face as it further uses blockchain technology? Chainlink community contributor Zach Rynes wrote on X: "It is extremely unlikely that the US government will use a unified blockchain to cover all departments and agencies. Do you think the ledger requirements of the EPA (US Environmental Protection Agency) and FDA (US Food and Drug Administration) are exactly the same as those of the DoD (Department of Defense) and DHS (Department of Homeland Security)? Probably not."

He said the U.S. government will eventually use multiple private and public ledgers for a variety of different purposes, such as increasing spending transparency or automating manual processes. What is certain is that:

• All of these different public/private blockchain ledgers need to be able to communicate and share data between institutions via cross-chain interoperability standards;
• Agencies need to be able to seamlessly connect their existing backend systems and infrastructure to the various public/private chains used by the government through an abstraction layer;
• Institutions using blockchain to automate manual processes need access to external data resources in order to securely trigger smart contract functions using oracles.
• A unified platform is needed to meet all these off-chain data, cross-chain interoperability, and legacy system connectivity requirements.

As Musk pushes the U.S. Treasury Department to put transactions on the blockchain, blockchain technology may be moving towards a new application area. The support of Coinbase CEO Brian Armstrong and ARK Invest founder Cathie Wood has added more attention to this topic. In the future, which blockchain platform can stand out and become the backbone of the government's digital transformation may have a profound impact on the entire crypto industry.