SPRINGFIELD — Illinois lawmakers have formed a subcommittee to explore state policies over decentralized digital currencies like bitcoin.
The Department of Financial and Professional Regulation doesn’t consider digital currencies valid. But some lawmakers believe digital currencies and blockchain technology may have benefits that could make state government more efficient.
Rep. Mike Zalewski of Riverside will chair the House subcommittee. Zalewski told the State Journal-Register that his goal is to understand whether a digital currency would be a worthy investment or a risky gamble.
“As lawmakers, we all want government to run more efficiently and transparently,” Zalewski said. “Distributed ledger technology has the promise to do just that — replace old antiquated systems with a modern approach to serving citizens’ needs.”
He said he hopes the subcommittee can create a policy that puts consumers first.
Digital currencies like bitcoin have gained popularity in the past decade. Digital currency is unlike traditional currency because it’s created and exchanged independent of banks or governments. Instead, they rely on peer-to-peer transactions that are recorded in an online ledger.
Blockchain is a database that can be used to record digital transactions and avoid duplication.
State Rep. Jaime Andrade of Chicago is chairman of the Cybersecurity, Data Analytics and IT committee. He said the aim of the subcommittee is to create an environment that “allows and fosters this technology.”
Andrade said a report will be released soon from the task force that was created last year to study how and if state, county and municipal governments can benefit from record keeping and service delivery based on a blockchain system.
No hearings have been scheduled yet for the new subcommittee.