Changpeng Zhao, the co-founder of Binance, is stirring the pot with a quite hot take, all governments should track their spending on the blockchain.
With global government debt did go past $102 trillion, CZ believes it’s high time for some serious transparency in public finances.
Inflation is theft
Elon Musk and the Department of Government Efficiency, dubbed DOGE, are exploring blockchain technology to keep tabs on government spending and tackle the federal deficit.
In a cheeky post on January 25, CZ stated, he got an idea for fiscal responsibility and transparency.
“Unpopular opinion: All governments should track all their spending on the blockchain — an immutable public ledger. It’s called ‘public spending’ for a reason.”
Let’s break it down, fiscal policy, aka how governments decide to spend, and monetary policy, aka how central banks manage money supply are tightly intertwined.
When former President Nixon ditched the gold standard in 1971, he claimed it was just a temporary fix.
Fast forward to today, and the U.S. national debt has ballooned to over $36 trillion, with inflation diluting the dollar’s value like water in a cheap cocktail.
There is a roundabout way?
A May 2023 report from the Congressional Budget Office warned that the U.S. Treasury might soon run out of funds, with annual deficits set to double in the next decade.
That’s not exactly comforting news, so with fixed-supply assets like Bitcoin gaining traction as potential solutions to inflation woes, some are even suggesting that Bitcoin could help pay down national debt.
CZ isn’t alone in this push for blockchain transparency. The immutable nature of blockchain means once something is recorded, it can’t be changed or erased, perfect for keeping an eye on government spending, Imagine if every dollar spent by the government was visible on a public ledger, it could force officials to be more accountable and responsive to citizens’ needs.
Mission impossible?
Musk’s DOGE initiative is reportedly considering how blockchain can track government expenditures and improve efficiency.
He’s aiming to cut down on wasteful spending, but despite all the excitement, not everyone is sold on this idea.
Critics point out potential corruption risks and implementation challenges. Senator Elizabeth Warren has voiced concerns about Musk’s influence over Dogecoin and its implications for government spending.
Moreover, integrating blockchain into existing government systems isn’t as simple as flipping a switch. It requires careful planning and execution to ensure everything runs smoothly.
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