Blockchain technology has gained traction across the U.S. government as a practical tool for multiple diverse purposes. From streamlining procurement to preventing fraud, agencies are increasingly exploring how blockchain can enhance transparency, security, and efficiency in federal operations. However, with innovation comes risk. The government is also looking into how to ensure the technology is not misused to conceal illicit activity, commit fraud, or obscure accountability.
Fraud Prevention
Since every transaction in a blockchain is recorded permanently, malicious actions are traceable, which increases accountability. Each transaction is unique and chronologically linked, meaning a record cannot be copied, altered, or duplicated without triggering detection. This level of traceability allows governments to confirm that payments are going to the intended recipients. For foreign aid, payments can be tracked not just to the intended country but as they continue on from there. In terms of domestic benefits, blockchain can verify the identities of welfare recipients, while simultaneously confirming their eligibility.
Legislation has been introduced to encourage the Department of Veterans Affairs (VA) to look more closely at the technology as part of their plans to improve benefits and services. If the bill passes, the VA would be required to share findings on how blockchain could enhance the administration of benefits decisions, as well as how it could improve the management and security of veterans' personal data, streamline the insurance claim process, and increase transparency and accountability.
Smart Contracts
Utilizing blockchain as part of a smart contract approach not only reduces opportunity for fraud, but also can lead to further automation of contracting activities. Terms and conditions of the agreement can be written directly into the code of a smart contract. Once the specified conditions are met, the contract will automatically carry out the agreed-upon actions without the need for manual oversight or enforcement. For example, a smart contract could match tax data with income transactions and calculate tax and social security deductions. A blockchain-based system could automatically transfer net salary and tax payments to respective recipients. Similarly, in selling a house or car, all of the time and money spent on validating titles and related paperwork could be eliminated by sharing and recording the information on a blockchain.
To support the expansion of blockchain in contracts and commerce, the Deploying American Blockchains Act of 2025 has been proposed. It tasks the Commerce Department with leading the effort to develop policies and programs that encourage blockchain adoption within federal agencies. If passed, Commerce will lead the exploration of blockchain issues including cybersecurity, storage and security systems, artificial intelligence, fraud reduction, e-commerce, regulatory compliance, and more.
Blockchain Intelligence
For all the good blockchain can do, there are also ways it can benefit bad actors. U.S. Immigration and Customs Enforcement is seeking ways to uncover how transnational criminal organizations might be using cryptocurrency for activities like financing terrorism and human trafficking. They are looking to analytic technology providers to help track cryptocurrency transactions, even when the actors are using obfuscation tactics. Doing so can uncover the financial infrastructure behind organized criminal enterprises and prevent proceeds from fueling further crime.
To stay on top of blockchain use and legislation, check out these events and resources:
- Digital Transformation Summit 2025 (September 17, 2025; Reston, VA) - This event will focus on where digital transformation is today, how it has been used to transition to new innovative technologies, and how it has improved overall performance.
- Border Technology Summit (September 23-24, 2025; San Diego, CA) - U.S. border operations demand advanced, integrated, and adaptive technologies for facilitating billions of dollars in lawful trade and countering the growing threats of human trafficking, drug smuggling, and unauthorized crossings. As threats evolve and the operational landscape grows more complex, the need for modern infrastructure, interoperable systems, and field-driven innovation is more critical than ever.
- Security & Risk Summit (November 15, 2025; Austin, TX) - Gain exclusive insights from Forrester's top analysts and access research-based best practices to stay ahead of today's complex security challenges. Sessions will explore the impact of AI, IoT, and blockchain on security protocols and risk management.
- How Blockchain Supports Key Government Priorities (white paper) - Blockchain is transforming how government agencies approach transparency, efficiency, and security. By enabling real-time tracking of transactions and automating processes like tax collection and benefits distribution, blockchain can help build public trust and streamline operations.
- The 2025 Crypto Crime Report (white paper) - Crypto-related crime evolved significantly in 2024, becoming more diverse and professionalized. The transparency of blockchain continues to help investigators trace illicit behavior, even as threat actors grow more sophisticated.
- Deploying American Blockchains Act of 2025 (white paper) - The House Appropriations Committee's report for the Department of Homeland Security details funding priorities and policy guidance for FY 2025. It emphasizes border security, cybersecurity, disaster response, and aviation safety while urging accountability in immigration enforcement and transparency in federal procurement.
For further information on blockchain in government, search for additional events and resources on GovEvents and GovWhitePapers.
