Three members of Congress are urging the U.S. Department of Housing and Urban Development (HUD) to halt any plans that involve cryptocurrency and blockchain technology, warning that these inadequately regulated tools should not be integrated into the agency’s oversight of the housing market.
In a letter sent to HUD Secretary Scott Turner on Wednesday, Representatives Maxine Waters, Stephen Lynch, and Emanuel Cleaver criticized the agency’s consideration of such initiatives, citing the inherent volatility and susceptibility to fraud associated with cryptocurrencies. The lawmakers, who are part of the House Financial Services Committee, expressed concerns about repeating historical missteps, especially in light of the financial crisis of 2008 that was partially fueled by risky financial products in the housing sector.
“The federal government must not allow under-regulated financial products to invade essential housing programs, particularly when these have previously proven to be dangerous, speculative, and harmful to families in need,” the legislators cautioned.
Their letter is a reaction to ProPublica’s reporting indicating that HUD had recently explored potential cryptocurrency usage. The report detailed discussions that took place in February about incorporating blockchain, and potentially stablecoins, into the agency’s operations, with some meetings focused on a pilot project for a specific HUD grant, leading to indications that the idea could be expanded across the agency.
One HUD finance official, who participated in those discussions, suggested that the technology could be implemented agency-wide. “We are examining this for the entire operation,” he stated during a meeting recorded by ProPublica. This raises concerns that vital aid forms such as grants supporting affordable housing and disaster recovery might some day involve unstable currencies.
In response to the letter, HUD spokesperson Kasey Lovett pointed ProPublica to an earlier statement by Turner, who claimed that “there’s no merit to it.” Lovett had reiterated previously that “the department does not have plans for blockchain or stablecoin” and clarified that education is not equivalent to implementation.
