A roster of blockchain industry executives believes moving the United States’ records and treasury transactions onto a blockchain would bring a string of benefits.
Jean Rausis, co-founder of the decentralized finance ecosystem SMARDEX, believes that moving the US Treasury’s transactions onto the blockchain would make the US a de facto crypto leader. However, he says the success hinges on the blockchain choice – and whichever network is chosen must be permissionless.
“Finally, a sensible idea,” Rausis said. “Elon Musk’s proposal to move the US Treasury onto the blockchain has been met with a certain amount of criticism, but it would be a major step into the future for America. If it works, the US would become the de facto global leader on blockchain innovation, so the stakes are high.”
Rausis said that governments have been exploring blockchain technology for various financial applications for some time, like tokenization and bond issuance, but this would be a first at such a massive scale. That is a stress test for the crypto ecosystem, with the main question being how this would work in practice.
“While it’s hard to say which blockchain would be up to the task, the important thing is that it is permissionless,” Rausis stressed. “Otherwise, the promised transparency would be just a sham. But if the US Treasury embraces decentralized infrastructure, this could be a catalyst for the Web2 and Web3 worlds to start merging.”
Harrison Seletsky, director of business development at digital identity platform SPACE ID, said Musk’s suggestion that the US Treasury’s spending should be on the blockchain for full transparency would be a huge win not just for the crypto industry but for every US citizen. Being able to track exactly where government spending is going would be groundbreaking and provide massive reassurance to everyone that the government is focused on optimizing spending.
“Some of the infrastructure that is currently available may be too expensive or not flexible enough for this type of endeavor at scale, and the user experience would need to be packaged in an easy-to-understand interface, but even with the industry’s current capabilities, it could definitely be done,” Seletsky advised. “Ethereum or Solana may seem like obvious choices due to their adoption, but a chain like Avalanche, which offers creators the ability to make fully customized base layer chains (L1s), would allow the government to customize the chain to directly fit their needs.”
“If they tie in Web3 domain names to easily identify the participating parties instead of just randomized receiving wallet addresses – such as treasury.gov or DOJ.gov instead of a 42-character jumble of letters and numbers – all the government would then need to do is create an easy to navigate block explorer for all citizens to have a clear picture on funding.”
Seletsky said various solutions could work together to create the resource network necessary for this transition onto the blockchain, although it may still take some time. This includes digital identity solutions and privacy tech, such as zk-proofs, as well as a customized Layer 1 or Layer 2 network that the US government could use to cater to its needs. However, it would take time to battle test before Elon Musk’s dream can become a reality.
Impossible Cloud Network managing director Sebastian Pfeiffer said that Musk’s call for the US Treasury to be brought on-chain underlines a growing distrust of centralized control that highlights a need for more on-chain, decentralized services globally. He also believes the Internet and cloud services should be the first things to fall under the same scrutiny as the US Treasury.
“Elon Musk’s call for government spending to be recorded on a public ledger raises a fundamental question: do we trust centralized actors with our most valuable assets—money, data, attention?” Pfeiffer asked. “If, as Musk suggests, we need full transparency in how governments spend public funds, shouldn’t we also demand an open, on-chain, and decentralized system for storing and managing our most important data?”
“In almost every area of our lives, we’re questioning the reach of centralized control. Not least in the centralization of the internet and cloud services, which are now a fundamental part of human life. Yet, this vital resource is controlled by a handful of companies. We entrust our data to these centralized giants without really knowing what they do with it.”
Pfeiffer said that centralization and its lack of transparency will increasingly be questioned inside the new US administration and beyond. Globally, we are – hopefully – moving in the direction of decreasing centralized control.
“In this world, we must explore more on-chain, decentralized solutions in every area, with internet and cloud services a top priority,” he concluded.
AR.IO founder and CEO Phil Mataras said the deletion of data from US government websites highlights the need for permanent and immutable storage solutions. He warns that the current cloud infrastructure can be easily censored and says blockchain is the only technology that supports truly free speech.
“The deletion of thousands of webpages from the government website has really shaken many communities in the US and has caused chaos for researchers and other federal data users,” Mataras said. “But it’s also incredibly disconcerting for many average Americans to see data disappear in a puff of smoke. If the government can delete these records, what else can they censor? What about personal data or historical records?
“The truth is that anything stored on the cloud today can be removed or edited by whoever wields control, to a point where we no longer know what’s true and what’s fiction. People worry so much about having their data captured, but not about the deletion or censorship of data. In reality, though, the latter is perhaps a bigger concern for future generations looking for a reliable record of the past.”
Mataras advised that if society wants free speech and information sources it trusts, it must turn to blockchain-based cloud solutions. Blockchain is immutable, so it offers the infrastructure for permanent data storage. While the benefits for financial transactions are well known, not many people realize that blockchain can also preserve historical records for decades and centuries, regardless of the political climate.