Illinois is positioning itself as an innovation and investment hub for blockchain technology with state and local units of government, investors, universities and financial companies partnering to nurture and deploy the technology.
Blockchain, also referred to as distributed ledger technology, came into focus as the information management system underpinning virtual currencies such as Bitcoin. But policymakers, technologists and financiers are increasingly seeing blockchain as an important tool for automating manual processes, cutting transaction costs, improving transparency, and reducing opportunities for fraud.
Several visible expressions of Illinois’ blockchain ambitions have emerged just this summer:
Matthew Roszak, founder of the CBC and chairman of the blockchain software company Bloq, sees Chicago as the engine for Illinois’ distributed ledger ambitions. With a long history of practical innovations in finance, technology and logistics, Roszak said Chicago is perfectly suited to lead a new tech revolution.
“The Chicago Bitcoin Center and now the Chicago Blockchain Center is part of an evolution we see with the technology and the industry,” Roszak told Bloomberg BNA. “With that narrative, coupled with a lot new partners coming together, we are really leveraging the natural DNA of this town. When you think of Chicago’s financial background and its logistics background, it has these natural resources to apply to this tech area. So the time is right and all the intersections are there.”
Roszak said the CBC will be much more than an incubator space for entrepreneurs. The center will host a wide range of educational programs, attract guest speakers and hold competitions to drive innovation. The center will also provide mentorship to entrepreneurs, giving them practical insights for deploying their blockchain ambitions.
Roszak said the success of the CBC will be driven in large part by a dozen partners with significant financial and technical experience. In addition to the IBI, the CBC’s founding partners include: FinTExChicago, the city’s financial technology trade association; the Chamber of Digital Commerce; and, the Blockchain Education Network, a consortium of universities investing in blockchain innovation.
Business partners include Roszak’s Bloq, the derivatives trading and venture capital firm DRW Holdings Inc., and CME Group Inc., which owns and operates the world’s largest options and futures exchanges. Additional partners include the law firm Perkins Coie LLP, which has a substantial blockchain practice, Tally Capital, a bitcoin venture capital firm, and the blockchain news and intelligence service Distributed.
Roszak said distributed ledger technologies are in the “second inning” of their development, but success could come quickly in Chicago. He said the CBC model had a strong track record when it operated exclusively in the bitcoin arena. Roszak counts his own company Bloq as a CBC success story as well as Mint, one of the largest networks of Bitcoin kiosks in the country with 62 locations.
“We are still early. We are still at a place like the early 90s Internet, but the promise of this technology is profound,” Roszak said. “It can be a new operating system for companies and government and society, but we’ve got a lot of building to do.”
O’Rourke said IBI is exploring blockchain strategies that will allow Illinois to provide residents with more efficient, integrated and reliable services. After an initial period of study, she said IBI this year launched five pilot programs that will utilize ledger technologies.
O’Rourke stressed that IBI is also committed to building an Illinois ecosystem that nurtures blockchain innovation. This will happen on the regulatory front with guidance and rules supportive of innovation. The Department of Financial and Professional Regulation’s final guidance on digital currencies is a strong example.
Similarly, O’Rourke said IBI Hack will challenge students and recent graduates anywhere in the world to develop blockchain projects in e-identity, digitized government, and connected cities. She said Illinois hopes the one-month competition will trigger some important projects, but also burnish the state’s reputation as a leader in distributed ledger technology.
“We wanted to throw a flag in the ground and let interested talent know we are here to support them, we have resources to share with them. And we want them to know they can come show us what they’ve got,” she said.
To contact the reporter on this story: Michael J. Bologna in Chicago at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
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