Trump Administration Plans to Restructure USAID with Blockchain

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The Trump administration has finally  unveiled its plan to restructure USAID. This comes just weeks after President Trump teamed up with Elon Musk to cut government agencies, which led to thousands of USAID job losses and the elimination of most foreign aid contracts. According to Politico, Trump wants to shrink USAID and focus it on global health, food security, disaster response, and countering China.

The proposal argues that current development programs are “inefficient and fragmented,” spread too thin across too many sectors and countries, which leads to poor results.

Trump To Rebuild Under His Image

Trump’s plan aims to focus on areas crucial to U.S. interests, like promoting peace, stability, and economic opportunities that benefit American businesses. It also targets global threats, such as pandemics. The proposal suggests that all aid programs should have clear end dates and be closely measured for success. After significantly reducing the 60-year-old agency, Trump aims to rebuild it under his image. 

Agency To Leverage Blockchain Tech

According to a memo circulating among State Department staff and reviewed by WIRED, the Trump administration plans to rename the United States Agency for International Development (USAID) as US International Humanitarian Assistance (IHA), and to bring it directly under the secretary of state. The document states that as part of its reorganization, the agency will “leverage blockchain technology” as part of its procurement process.

The agency will use blockchain technology to improve security, transparency, and traceability in its aid distribution. However, it’s unclear whether this will involve cryptocurrency, stablecoins, or simply using blockchain to track aid.

The memo comes as USAID staff are uncertain about the agency’s future. USAID was a major target of the Department of Government Efficiency (DOGE), led by Elon Musk. After President Trump’s inauguration, the State Department placed all USAID staff on administrative leave, cut the workforce, and halted some payments to global partners, including those providing lifesaving aid. 

Is It Unnecessary?

According to Linda Raftree, a consultant helping humanitarian groups adopt new tech, few blockchain projects have succeeded in the sector because the technology is often unnecessary. “It feels like a solution to a problem that doesn’t exist,” she says, noting that in most cases, existing tools could do the job just as well.

Besides, Giulio Coppi from Access Now says blockchain offers no clear advantages over other tools like payment systems, and its promotion as a “tech solution” has shown little real impact.

Critics Argue Over Flexibility

However, Blockchain technology has seen some success in the humanitarian sector, such as the UNHCR’s pilot project providing stablecoins to Ukrainians and trials by the Kenya Red Cross. While blockchain can make money transfers faster and easier, it also introduces new burdens for small NGOs. 

The proposed adoption of blockchain at USAID aims to tie funding to results, but some employees argue this approach may not be flexible enough in disaster or conflict zones. Critics, like Linda Raftree, feel this push supports claims of corruption within USAID, even though the agency already pays based on completed work.