2017 has proved to be a busy year for legislation in blockchain technology. While not every state is necessarily coming around to the blockchain, most are at least addressing the technology.
It’s reported by BlackLine Advisory Group that as of July 27, “at least 16 bills have been enacted or proposed this year,” while “at least 26 states — ranging from Alaska to West Virginia — have either introduced or enacted legislation regulating blockchain in some manner.” However, the legislation varies widely: Arizona has made it illegal to track the use of a firearm with a blockchain; Texas legislators have proposed amending their constitution to protect the right of its citizens to use digital currency when procuring goods and services; and Utah has subjected digital currencies to the state’s Unclaimed Property Act, perhaps to keep tabs on forgotten digital wallets for fear that they are left collecting dust. It’s clear that at the state level, the United States is keenly aware of the blockchain.
One of the more financially innovative of these state governments is Illinois. In 2015, Mike Wons joined the State of Illinois’ Department of Technology and Innovation as the first statewide Chief Technology Officer. Won's main priority has been to lead the Illinois “FIRST” IT Strategy.
The Illinois FIRST plan focuses on accelerating the statewide modernization and competition for high-value customer-centric technology. The strategy assesses emerging technologies in cybersecurity, cloud services, analytics, data integrity and workflow automation, then devises actionable guidelines, plans and resources for businesses to follow toward implementing technology to improve services for citizens.
On Nov. 30, 2016, the Illinois FIRST Strategy appointed their first business owner liaison for blockchain, Jennifer O’Rourke, who is also the assistant deputy director at the Illinois Department of Commerce’s Office of Entrepreneurship, Innovation and Technology. On the same day, the initiative put out numerous requests for information on the regulatory environment around blockchain application in the private sector, and solicited suggestions regarding how it might improve services for citizens. Out of the responses came 25 different use cases; these were narrowed down to five, selected as proofs of concept, to be delivered by the end of 2017.
In an interview with the IT publication GCN, Wons admitted that Illinois’ blockchain implementation strategy was modeled after the state of Delaware’s program to support blockchain technology use. But Wons asserted that Illinois’ program has been “taken to a deeper level with this transaction-based approach.” Throughout the interview, Wons showed evident anticipation for a blockchain’s capabilities at the state level. “For us, blockchain is the next generation of the internet. It is essentially an interoperability platform to work with trusted partners through distributed networks to complete transactions at a lower cost, which fundamentally changes our activities.”
Wons also suggested that a low budget has been both the carrot and stick for the Illinois Blockchain Initiative. “Not having a budget forced us to become more efficient so it has been sort of a godsend. We don’t want to stay in this position forever because we realize that there are things that still need to be resolved with our debt.” As of June 2016, Politico reported Illinois as having compiled $14.6 billion in unpaid bills, running a deficit of $6 billion, and accumulating a pension liability of approximately $130 billion.
While Illinois’ debt is a likely motivator for the state’s development in technological innovation, blockchain technology could be another carrot — or incentive-driven solution ― to at least some of the state’s financial woes. Illinois’ five blockchain-technology use cases, which have now turned into official projects, range in sector and scope but include managing property deeds within Cook County; credentialing for student transcripts; credentialing healthcare providers; creating a clean-energy marketplace through blockchain technology; and finally, marshaling some vital credentialing, such as making birth certificates available electronically.
Illinois’ third use case employs the blockchain as a shared and decentralized registry to manage the credentials and licensure of health professionals. The project’s goal is to use blockchain as a solution that can streamline a specific, cumbersome, multi-party process. The expected outcome will be reduced time and expense of collecting and verifying multiple pieces of a professional's credentials in order to issue them licenses.
To initiate this use case, the Illinois Blockchain Initiative has partnered with the blockchain healthcare innovation company Hashed Health, based out of Nashville, Tennessee. Together, they will explore opportunities to improve medical credentialing in Illinois through a pilot program. The concept is to use a blockchain-based registry to streamline the sharing of medical credential data and smart contracts to automate workflow related to multi-state and interstate licensure.
Illinois Department of Financial and Professional Regulation (IDFPR) Secretary Bryan Schneider has laid out expectations for the collaboration: “In the short-term we anticipate this pilot will show how distributed ledger technology can help reduce the complexity of interstate licensing processes in Illinois. In the long-term, we see this as a secure, privacy-enhancing way in which state licensure boards can efficiently manage credentialing at a national scale.”
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