Illinois government joins blockchain initiative and will issue digital currency regulatory guidelines

An early trial of blockchain insurance services offered by the US state of Illinois has grown into a formal state initiative.

The Illinois Blockchain Initiative, officially announced today at the Chicago Blockchain Conference, involves not only companies but also five government agencies. This is a strategically important move because it not only makes it easier for blockchain companies to innovate, but also removes barriers to government use of blockchain.

In a conversation with CoinDesk, Illinois Department of Financial and Professional Regulation Secretary Bryan Schneider said:

“The fact that this initiative has allowed these institutions to come together and share best practices and ideas, I think is an incredibly powerful engine and shows that Illinois government is doing its best to break down these barriers.”

In addition to Schneider's department, the founding members of the Illinois Blockchain Initiative include the state's Department of Commerce and Economic Opportunity (DCEO), the Department of Insurance (DOI), Cook County's Recorders of Deeds, and the newly formed Department of Innovation and Technology (DoIT).

Focus Areas

According to Schneider's full remarks, he broke down the initiative into three more specific areas of focus.

Among them, the inter-institutional alliance is the first goal, he explained, which is to create a warm and friendly regulatory environment for digital currency and blockchain companies. The second is to invite blockchain companies to open offices in the state, and the third is for the Illinois government to develop a specific blockchain application prototype.

To accelerate the integration process of blockchain technology, today, the Illinois Department of Innovation and Technology (DoIT) also issued a request for information (RFI), inviting the blockchain community to participate in this initiative and provide relevant feedback.

While the state hopes to leverage the influence of CME Group, which is headquartered in Chicago, CME Group Chief Technology Officer Mike Wons said he hopes the initiative will lead to a steady stream of startups entering the blockchain space.

Wons told CoinDesk:

“You’ll realize that this requires a lot of entrepreneurial companies to come into the environment and help solve the problem. The big manufacturers are just platform providers, but they are not necessarily the enablers.”

Early embryonic stage

While the initiative is still in its early stages, several of the consortium’s participants are already exploring various applications of distributed ledgers, including those that could simultaneously save taxpayers resources and improve their access to services.

Last month, Illinois Department of Insurance Director Melissa Dowling revealed that the alliance would form a working group to develop a blockchain strategy.

At the time, Dowling worried that a lack of uniformity would slow progress, even as her department was exploring how blockchain could speed up the process by which actuaries determine the economic consequences of an event.

Schneider reiterated Dowling's concerns, adding that the cross-industry initiative is aimed at ensuring that doesn't happen.

Schneider’s financial and professional regulatory department is reportedly currently building a blockchain application that can simplify mortgage transactions.

Removing business uncertainty

According to Sean McCarthy, acting director of the Illinois Department of Commerce and Economic Opportunity, he has appointed Jennifer O'Rourke, assistant deputy director for corporate innovation and technology, as the first blockchain business liaison.

According to O'Rourke herself, her role is to serve as a "resource facilitator" for blockchain companies. Current policies include subsidies or tax incentives, but she does not rule out the introduction of more support methods in the future.

Additionally, Schneider expects that he will release the state’s “数字货币监管指引” today, which have not yet been made public at the time of writing.

Schneider concluded:

“Regulation can be a dangerous thing if it’s not handled carefully. It can stifle innovation and jobs, so we want to make sure we don’t do that, but we also don’t want to leave the regulated community in a state of uncertainty for too long.”