In today’s newsletter, Michael Carbonara, candidate for the United States House of Representatives, explains how blockchain can provide transparency in government operations.
Then, Alec Beckman answers questions on government use cases in Ask an Expert.
– Sarah Morton
Real-time Government Transparency Requires Blockchain and Clear Rules: Opinion on the CLARITY Act, & Its Direct Impact on the US
When people talk about transparency in government finance, they usually mean better reporting standards in integrity, speed, and security. But the deeper problem in the United States is more fundamental: we still lack clear rules about which federal agencies regulate digital assets. The United States has spent too long stuck in the Securities and Exchange Commission (SEC) versus Commodities Futures Trading Commission (CFTC) gray zone. This is the context in which the CLARITY Act comes in.
The CLARITY Act is fundamentally a federal statute focused on clarifying which federal agency regulates which type of digital asset. It does not create a new state regulatory regime or overhaul how states license or supervise digital asset businesses. What it will do is define different asset categories, such as digital commodities or securities, and designate which federal agency regulates which activities. The CFTC oversees digital commodities and trading platforms; the SEC oversees restricted digital assets and securities-like offerings. It does not preempt or replace existing state-level regimes like state money-transmitter laws or crypto-specific state frameworks. State vs. federal issues matter, but they’re downstream of the SEC/CFTC classification problem.
Market Maturation
Crypto maturity is often measured by price stability and volatility, but that is a misinterpretation of the point. True maturity is about whether technology and market structure can support institutional participation, compliance expectations, and reliable financial reporting. Clearer rules have brought more institutional participants into the space, unlocking technologies that improve efficiency and transparency.
Real-time visibility changes incentives
Politicians report campaign contributions and expenditures to the Federal Election Commission (FEC) quarterly, a timeline that seasoned incumbents know how to exploit.
A practical example of how public blockchains can increase accountability while preserving privacy is campaign fundraising and financing. I have personally funded a campaign by placing my own funds into bitcoin held in a wallet that can be tracked in real time rather than reported quarterly. Real-time disclosure doesn’t just reveal misconduct faster; it discourages it from happening in the first place.
Beyond Campaigns
The same concept applies beyond campaigns. Blockchains can increase accountability when governments use them to make payments or distribute funds for government programs. Using a public ledger with identified wallet addresses for government and non-government entities that already have public reporting obligations, agencies could send and receive payments with real-time delivery and public counterparty verification. Taxpayers could actually see when their dollars are at work, who is getting paid, and when. That transparency prevents fraud and abuse by creating both efficiency and accountability. At the same time, individual privacy must be protected.
Wallets enable real-time transparency and audit capability. That is the purpose of distributed ledger technology. If citizens demand that the government adopt similar tools where appropriate, we gain the ability to literally follow the money as it moves and catch waste, fraud, or abuse in its tracks. Integrity in government spending leads to more freedom and a higher quality of life because resources are not lost to inefficiency and corruption.
Regulation
Regulation in this space is often misunderstood as a question of permission or prohibition. More than 52 million Americans already use crypto. The role of regulation is to provide clarity, close knowledge gaps, and prevent bad actors from exploiting uncertainty, not to stifle innovation.
If the U.S. fails to adopt blockchain-based transparency tools as digital finance scales globally, the risk is simple: falling behind. It cannot be stopped, only delayed. Countries that fail to lead in Web3 infrastructure will be left out of the next digital economy.
Responsible adoption under the CLARITY framework means measurable outcomes and strict guardrails: using blockchain only where it reduces fraud, cost, and time; transacting through registered intermediaries; enforcing compliance with the Bank Secrecy Act, anti-money laundering regulations, and sanctions; maintaining audit-grade transparency and custody controls; and avoiding a retail Federal Reserve Central Bank Digital Currency (CBDC). Done right, blockchain can enhance transparency, protect privacy, and strengthen American leadership in the digital age.
– Michael Carbonara, candidate for U.S. Representative (R) FL-25, founder and former CEO of Ibanera
Ask an Expert
Q1: How can blockchain meaningfully improve transparency in government operations?
At its core, blockchain creates a permanent, time-stamped record that is very hard to change after the fact. That can be useful in areas such as government spending, procurement, grants, or land registries, where trust and auditability matter. Instead of relying on reports that come out months later or databases controlled by a single party, activity can be verified closer to real time. Transparency also does not mean everything has to be public. Permissioned blockchains and tools such as zero-knowledge proofs can demonstrate that rules were followed without exposing sensitive data. When used properly, blockchain shifts some trust away from institutions and toward verifiable systems.
Q2: What are the biggest misconceptions about blockchain or crypto in government transparency?
One big misconception is that transparency means putting all government data on a public blockchain for anyone to see. In practice, most real-world use cases require a balance between openness, privacy, and security. Another misconception is that blockchain by itself solves governance problems. It does not. Blockchain can be used as a tool to better support oversight, but it still depends on clear policies, good incentives, and accountability around how it is used.
Q3: Where are we most likely to see real adoption first?
Adoption is likely to start in fairly narrow use cases where the benefits are obvious and the risks are manageable. Examples include tracking how government funds are distributed, monitoring supply chains tied to public spending, or verifying certain credentials and records. These areas benefit from better audit trails without requiring governments to overhaul everything at once. Over time, if these pilots work, they can expand into broader systems as comfort and standards improve.
– Alec Beckman, vice president of growth, Psalion
Keep Reading
- SEC chair says that all US markets could be on-chain within 2 years.
- Bitcoin surpasses $97,000 as spot exchange-traded funds see largest inflows since October.
- U.S. senators unveiled draft legislation to clarify crypto rules for financial regulators.
