As the U.S. government intensifies its fight against fraud, Mike Belshe, CEO of Bitgo—one of the largest crypto custodians—has proposed a radical fix: move all public spending onto a public blockchain. “There is a solution to all this state and federal fraud that doesn’t require abolishing money: put it on a public blockchain,” Belshe wrote on social media.
The $521B Fraud Crisis
The federal government estimates that fraud costs the U.S. up to $521 billion annually, spanning healthcare, unemployment insurance, infrastructure, and more. President Trump has called it “widespread theft” and appointed Vice President Vance as “fraud czar,” targeting Democratic-led states including California, Illinois, Minnesota, Maine, and New York. Recently, eight people were arrested in California for allegedly defrauding over $50 million from healthcare programs. The Treasury Department noted that “complex fraud networks in Minnesota have stolen billions of dollars from state programs for personal enrichment at home and abroad.”
Public Blockchain: From Audit to Real-Time Oversight
Belshe envisions using a public blockchain like Ethereum to disburse federal grants to NGOs and publish every transaction and recipient address for public scrutiny. “Citizens will take care of the rest,” he asserts, meaning anyone can track fund flows in real time and flag suspicious activity. This replaces slow, expensive audits with perfect transparency, as every transaction is permanently recorded and immutable.
Russia’s Digital Ruble Already in Action
Russia has already proven the concept. After limited budget trials in 2025, the digital ruble—a central bank digital currency (CBDC)—was enabled for all federal payments starting January 2026. Authorities stated this case “fully leverages the capabilities of the digital ruble.” While Russia’s CBDC is a permissioned ledger, the underlying principle of transparency to combat fraud is identical to Belshe’s public blockchain proposal.
Challenges and Controversies
Despite the appeal, putting all government spending on a public blockchain raises serious issues: privacy of beneficiaries, transaction throughput (Ethereum handles ~15 TPS, far below the millions of daily government payments), and the need for a completely new legal framework. Belshe’s proposal is less a concrete plan and more a provocative thought experiment that highlights how blockchain could shift from a speculative asset to a governance tool. If implemented, the U.S. could save hundreds of billions annually and restore public trust. With Russia already operating its digital ruble, governments worldwide are watching closely to see if blockchain can deliver fiscal transparency at scale.