Finance expert warns against crypto use in government systems

Integrating cryptocurrency technology into U.S. government systems may pose significant risks, according to a finance expert. Hilary J. Allen, a professor at American University, testified before Michigan lawmakers that using blockchain for federal payments could make the system more vulnerable to cyber-attacks. Allen raised concerns about potential operational risks if cryptocurrency projects like Elon Musk’s DOGE team were allowed to manage federal payments. She explained that making payment transactions visible could expose them to criminal activity. This could affect Americans who rely on government payments, such as Social Security and Medicare. A recent incident raised alarms when DOGE staff gained access to the Treasury Department’s payment systems, which manage over $5 trillion in disbursements. A DOGE employee briefly had the ability to change payment system code, which was later acknowledged as an error. Democrats are now highlighting the risks of allowing a young tech team to work with sensitive government systems. Legal problems for DOGE are growing. A federal judge recently blocked them from accessing Social Security systems and ordered them to delete any personal data they had collected. Concerns about the constitutional validity of DOGE's work with the United States Agency for International Development (USAID) have also been raised. Allen emphasized that a failure in the government payment system could disrupt the economy and potentially lead to defaults on U.S. Treasury securities. She warned that young staff members working with legacy systems like COBOL may not know how to handle them securely, risking vulnerabilities that could be exploited. The implications don't just affect the government; the private sector could be at risk too, as noted by the 2017 NotPetya cyber attack. Allen advised that businesses should investigate these risks to safeguard sensitive information. While some lawmakers were skeptical of these warnings, Allen stressed the importance of caution. She argued that problems could take time to emerge but could significantly impact the economy and individual lives. She suggested people prepare by saving money and being vigilant against identity theft.