Three federal lawmakers call on the US Housing and Urban Housing and Urban Development Department to stop any cryptocurrency and blockchain initiatives, saying that regulated technologies should be stored far from the country’s housing sector.
In a letter HUD Scott Terner Secretary on Wednesday, representatives of Maxim Waters, Stephen Lynch and Emmanuel Clever criticized the agency for taking into account such experiments, given the volatility of cryptocurrency and vulnerability to fraud. Democratic representatives, all members of the Financial Services Committee, warned of repeating “the same mistakes of the past”, noting that the 2008 financial crisis was partially caused by the spread of risky financial assets in the housing market.
“The federal government cannot allow insufficient financial products to penetrate critical housing programs, especially if they are already dangerous, speculative and harmful to working families,” the legislators write.
The letter is the answer to reporting propublica that housing agencies recently discussed measures before using cryptocurrency. The article describes meetings in February, at which officials discussed the inclusion of Blockchain – and possibly the type of cryptocurrency, known as Stablcoin – into the work of the agency. The discussion at one meeting was focused on the pilot project involving one HUD grant, but the HUD official, who was present, showed that the idea could be applied much more expanse in the agency.
“We look at this all the enterprise,” he said at this meeting, which was received by Propublica. “We just wanted to start in the CPD,” he added, referring to the HUD planning and development management. The office manages billions of billions of grants to support low and moderate income, including financing affordable housing, homeless shelters and recovery, raising the perspective that these forms of assistance can be paid in unstable currency one day.
Asking to comment on the letter, the HUD Cassie Lautt press -secretary sent Propublica to the previous commentary, in which he said, “There is no merit.” Previously, Lautt said Propublica: “There are no plans for blockchain or stablecoin. Education is not implementation.”
It is unclear how the crypto project will work. But HUD officials hinted at the possible use of stabbits that are tied to the US dollar or other asset. This is supposed to protect the stables from the wild differences that occur among bitcoin and other cryptocurrencies, although such fluctuations occurred with stable in the past.
The HUD proposal has aroused anxiety among some officials, while comparing the idea in internal discussions with the payment of grants in “monopoly money”. At best, one HUD employee told Propublica before that the idea was a waste of time and resources; In the worst case, it became a threat to the stability of the housing sector.
“This is just the introduction of another unregulated security for the housing market, as if 2008, 2009 did not happen,” the employee said, citing a mortgage crisis. “I don’t see any way, it won’t help anything. I see many ways that it can hurt.”
The official HUD, which pushed the idea internally, was Irving Dennis, a new deputy director of the agency, an employee said at one of the meetings. Dennis denied PROPBLICA that HUD considered any such experiment. He published a book in 2021, in which he wrote that HUD should use Blockchain.
Blockchain is a digital book that is most commonly used to record cryptocurrency transactions. Technology instructions reflect this as a way to reduce intermediaries such as financial transactions, and make these operations more transparent and safe. One of these evangelists is Robert Jadson, head of the Consulting Firm Ey, which is included in the document obtained by Propublica as a participant of one of the HUD meetings. Judson wrote Sunshine over the potential blockchain prevent abuse of help. (Previously Dennis was a partner in EY.)
Judson and Hey did not respond to a comment to this article, but Judson had previously confirmed Propublica that Ey discussed the case with the agency officials.
In their letter, three representatives asked for extensive information from HUD about his cry and blockchain, including whether the agency’s risk use agency was evaluated. It is planned to consider the Committee on Financial Services of the House of Representatives bill on Wednesday which would Adjust the stable.
