by Jesse Coburn

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The U.S. Department of Housing and Urban Development is considering taking a first step to using cryptocurrency, according to a meeting recording and other materials reviewed by ProPublica and three officials familiar with the matter. Two officials told ProPublica they believe the initiative may be a trial run for the use of crypto across the federal government.

The discussions have sparked concern among some at the department, especially about the prospect of paying recipients of major federal grants in cryptocurrency, an uninsured digital asset associated with financial speculation, dramatic swings in value and transnational crime.

The focus of the discussions so far has been experimenting with using the underlying technology that makes crypto possible — the blockchain — to monitor HUD grants. Blockchain advocates argue that the technology is valuable on its own for such purposes. But the primary use of blockchain, according to experts, is for crypto transactions.

“It’s just introducing another unregulated security into the housing market as though 2008, 2009 didn’t happen,” one HUD staffer said, referring to the subprime mortgage crisis. “I don’t see any way this will help anything. I see a lot of ways this could hurt,” said the official, who, like others in this article, spoke on the condition of anonymity for fear of retribution. The HUD discussions have covered the potential use of a stablecoin, a form of crypto that is pegged to another asset to avoid wild swings in value, although such swings have happened in the past.

The blockchain idea is being pushed, a HUD official told colleagues, by Irving Dennis. Dennis, the agency’s new principal deputy chief financial officer, is a former partner at the global consulting giant EY, also commonly known by its original name, Ernst & Young. EY itself is involved in the proposal as well: An executive of the firm discussed the idea with HUD officials last month.

The crypto industry has found an ally in President Donald Trump, whose administration has tapped industry boosters to lead federal agencies, backed off investigations into crypto firms and created a “

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