Representatives of encryption experiments – ProPublica requests

Three federal legislators call on the US Housing and Urban Development to stop any initiatives that involve an encrypted currency and Blockchain, saying that the technologies that organize it in a frightening way should remain far from the agency’s work that supervises the country’s housing sector.

In a message To the Secretary of HUD Scott Turner on Wednesday, the representatives of Maxine Waters, Stephen Lynch and Emmanuel Clever criticized the agency sharply to consider such experiments, given the fluctuations of encrypted currency and fraud. Democrats, and all members of the House of Representatives Financial Services Committee, warned against repeating “the same mistakes in the past”, noting that the 2008 financial crisis has arisen partially through the spread of risky financial assets in the housing market.

“The federal government cannot allow low financial products to infiltrate critical housing programs, especially when they have already proven that they are dangerous, speculative and harmful to working families.”

The message is in response to Reporting by propublica The Housing Agency recently discussed taking steps towards using the cryptocurrency. The article described the meetings in February in which officials discussed the Blockchain inclusion – and perhaps a kind of cryptocurrency known as Stablecoin – in the agency’s work. The discussion focused in one meeting on a trial project that includes one HUD grant, but the HUD financing official in the attendees indicated that the idea can be applied more expanding throughout the agency.

“We are looking at this for the entire institution,” he said at this meeting, a registration obtained by ProPublica. “We just wanted to start with CPD,” he added, referring to the community planning office and its development in Hood. The office runs billions of dollars as grants to support low and moderate income persons, including cost -cost housing financing, homeless shelters, and disaster recovery, which provokes the possibility that these forms of aid will be paid one day in an unstable currency.

When asked to comment on the message, HUD spokesman Cassi Lofit referred ProPublica to a prior comment by Turner, in which he said, “There is no advantage for that.” “The administration does not have plans for Blockchain or Stablecoin. Education is not implementation.”

It is not clear how the encryption project will work. But HUD officials referred to the possible use of Stablecoins, which are linked to US dollars or any other origin. Stablecoins is supposed to protect from wild fluctuations in the common value between bitcoin and other cryptocurrencies, although these fluctuations have occurred with Stablecoins in the past.

The HUD proposal sparked the warning between some officials, as one of them compares the idea in the internal discussions to pay the grants in “Monopoly Money”. At best, I told one of the former Hud Propublica employees, the idea was a waste of time and resources; In the worst case, it was a threat to the stability of the housing sector.

In reference to the mortgage crisis in the mortgage, the employee said: “It only provides another unorganized security in the housing market as if it was 2008 and 2009 did not happen,” referring to the mortgage crisis without mortgage. “I don’t see any way this will help anything. I see many ways that might hurt it.”

One of the meeting employees said that the HUD official who prompted the idea internally was Erfing Dennis, the agency’s new deputy director of the agency. Dennis from Profublica denied that HUD was thinking about any such experience. He published a book in 2021 in which he wrote that HUD should use Blockchain.

Blockchain is the most used digital professor note to record encrypted currency transactions. Imagine technology reinforcements as a way to reduce intermediaries such as banks of financial transactions and make these transactions more transparent and safe. One of these missionaries is Robert Jodson, an executive official at the Consulting Company, who is included in a document obtained by ProPublica as a lecturer in a HUD meeting. Godson wrote Glowing about Blockchain capabilities to prevent misuse of aid money. (Dennis was a partner in EY.)

Godson and EY did not respond to requests to comment on this article, but Jodson previously confirmed to PROPUBLICA that EY had discussed the matter with agency officials.

In their letter, the three actors asked HUD intensive information about looking at Crypto and Blockchain, including whether the agency has valued the risk of using technology. The Financial Services Committee is scheduled to consider the House of Representatives The draft law on Wednesday Stablecoins.