Elon Musk, who leads President Donald Trump’s Department of Government Efficiency (D.O.G.E.), has called out the U.S. Treasury for approving fraudulent payments and suggested blockchain as a solution.

His remarks came in response to concerns about inefficiencies and mismanagement in the Scott Bessent-led department.

Could Blockchain Solve Treasury Fraud?

The controversy started when Musk took to X on February 2, stating that career officials in the U.S. Treasury were “breaking the law every hour of the day” by approving unauthorized and unlawful payments. Earlier, without offering proof, he claimed that these officers were under instructions always to approve payments, even to “known fraudulent and terrorist groups.”

His remark was quickly picked up by crypto commentator Mario Nawfal, who then asked, “Should the Treasury be put on the blockchain so this doesn’t happen?” Musk’s response was a decisive “Yes!” igniting discussions on whether distributed ledger technology could help streamline federal government practices.

Advocates argued that moving Treasury transactions on-chain would create an immutable, real-time record of every dollar spent. They suggested that this level of transparency could help eliminate backroom deals, misallocated funds, and hidden handouts.

Contributing to the conversation, Nawfal detailed how the Treasury executed transactions worth trillions daily, but its systems remain opaque and inefficient, enabling fraud and mismanagement. He claimed that on-chain transactions could ensure a fraud-proof system, effectively stopping off-the-books deals and cases of missing funds.

Podcast host Lindsay Poss highlighted Ukraine’s Transparent Network as a real-world example of blockchain in government finance. She noted that the system tracks reconstruction funds, helping combat the estimated 40% of aid lost to corruption.

Others echoed similar views, with X user Keeny mentioning that real-time tracking could revolutionize large financial systems. However, some, like Aquino, a crypto trader and analytics developer, were more cautious. They suggested that there could be challenges in implementing such a shift, including political resistance and the complexity of overhauling legacy infrastructure.

Musk Under Fire

Musk’s remarks come in the wake of reports that D.O.G.E. may have gained access to sensitive taxpayer data held by the U.S. Treasury in an attempt to “illegally withhold payments” to various government programs.

Last month, the Tesla CEO found himself on the wrong end of a lawsuit by the U.S. Securities and Exchange Commission (SEC), alleging he failed to disclose his X holdings within the required timeframe after acquiring over 5% of the social platform’s stock.

He is currently the sole head of the D.O.G.E task force following the resignation of co-lead Vivek Ramaswamy in January. The billionaire businessman previously warned that some of the measures his team would enforce could possibly slow down the growth of Bitcoin’s value.