Can blockchain fix government spending issues?

Government budgets often disappear into black holes of bureaucracy. But what if every cent could be traced at the click of a button? Blockchain might just make that possible.

In an exclusive interview, crypto and blockchain commentator Alex Chehade told The Crypto Radio that blockchain’s open ledger could help eliminate fraud and inefficiencies by making every transaction visible and permanent.

Blockchain’s tamper-proof record allows real-time monitoring, enabling citizens to verify that taxes and public funds are used as promised. This transparency could significantly increase trust in government spending.

Blockchain and government trust

Discussing Elon Musk’s use of blockchain to combat fraud as head of the US Department of Government Efficiency (DOGE), Chehade said it was a great way to improve accountability.

“So with blockchain, we can enhance data integrity, information security, streamline transactions… and that should streamline and reduce waste and fraud, because it's verifiable,” Chehade said.

However, government adoption of blockchain isn’t without challenges. Regulatory uncertainty and outdated systems slow progress. Technical hurdles, like blockchain networks’ slower speed compared to traditional servers, limit their use for high-volume government operations. Agencies also need specialized expertise and infrastructure to integrate the technology.

"It's a new technology. And, you know, conservative institutions always move slowly,” Chehade said. “Until recently… specifically in the US… it's only since the newest administration's come in that people are seeing a little bit more clarity."

Blockchain adoption also faces scalability challenges. Unlike traditional servers that handle vast amounts of data quickly, many blockchain networks struggle with speed and capacity. This limitation could slow down government operations, making the technology less practical for large-scale use without further advancements.

A transparent ledger for public spending

Blockchain’s transparency is its defining feature. Every transaction is recorded permanently, preventing edits or hidden transactions. “Rather than trying to change and backdate transactions and off-the-record transactions that people don't want, all the transactions are there permanently,” Chehade said. “(This) increases trust, security, and longevity."

This visibility could reduce waste and fraud by allowing taxpayers to monitor government spending in real time. The shift from traditional systems to blockchain, however, requires time and resources. Compatibility between different blockchain systems, known as interoperability, is another obstacle, as competing networks vie for dominance.

Beyond transparency, blockchain could also help automate processes through smart contracts—self-executing agreements coded directly onto the blockchain. These contracts could eliminate intermediaries, reducing costs and speeding up transactions. For example, infrastructure contractors could receive payments automatically once predefined milestones are verified, ensuring faster and more reliable service delivery.

However, widespread adoption of smart contracts requires governments to standardize processes and update regulations. Ensuring that contracts meet legal requirements and work seamlessly across different blockchain platforms will be essential for success.

Memecoins meet public services

In a surprising twist, governments are also exploring blockchain through unconventional channels. The UAE Ministry of Energy and Infrastructure’s recent partnership with Shiba Inu’s blockchain tools blends high-tech innovation with the pop culture appeal of memecoins.

"If we take a step back, meme tokens are what we described as tokenized culture,” Chehade said. “And so, from what I can see, it's a form of engagement and a lot of promotions and mechanisms to engage with your stakeholders as customers."

While memecoins may seem far removed from public services, their use demonstrates blockchain’s flexibility and potential for broader applications. Some experts believe that governments could harness similar engagement techniques to boost civic participation, such as using blockchain-based reward systems for community initiatives or environmental programs.

Crypto volatility and blockchain’s future

Meanwhile, the broader crypto market remains volatile, influenced by policy debates and economic shifts. “In the short term, everyone's still digesting what happens in the US. President Trump is still debating larger economic issues, and with these economic wins and changes in policy and rhetoric, crypto is very susceptible,” Chehade said. “It's a volatile asset class… either people have withdrawn into stable tokens, US dollar stable tokens, or moved to Bitcoin, which has sort of outperformed the rest of the crypto market over the last few days, but yeah, much more volatility to come."

This volatility reflects broader uncertainty about cryptocurrency regulation, especially in the United States. Recent government crackdowns and shifting policies have made investors cautious, impacting both cryptocurrencies and blockchain companies. Some experts argue that clearer regulations could help stabilize the market, encouraging more widespread blockchain adoption.

Skepticism surrounds projects like the Trump memecoin. Without clear guidance on its purpose and treasury use, its long-term value remains uncertain. “Generally, with meme tokens, to be successful, they need to have a little bit of a clearer vision of what to do with the Treasury, what to do with the token, and what it means,” Chehade said. “And we haven't seen that guidance from the Trump meme token."

The road ahead for blockchain in government

Blockchain’s potential to transform government transparency is clear. Its immutable ledger offers a future where every public transaction is visible and accountable. But for this vision to become reality, governments must address regulatory, technical, and institutional barriers—building the infrastructure and expertise needed to make blockchain a cornerstone of public finance.

Chehade remains optimistic that progress will accelerate as more governments recognize blockchain’s benefits. “As these systems become more proven and regulators see the benefits, we'll start seeing more real-world applications that benefit both governments and citizens alike,” he said.

From enabling real-time spending oversight to automating contracts and boosting civic engagement, blockchain’s influence on government operations could be profound. While challenges remain, the technology’s promise of greater transparency, efficiency, and accountability may soon reshape the way public funds are managed worldwide.

As governments continue to explore blockchain's possibilities, its success will depend on striking a balance between innovation and regulation. If they can achieve this, the future may hold a world where every taxpayer can see exactly how their money is spent—down to the last dollar.

 

Listen to the whole interview on The Crypto Radio's live player or in The Pulse podcast.