As the underpinning technology to the digital currency bitcoin, blockchain technology is still in its infancy stage. While companies learn more about the technology, various financial institutions are dipping their toes into the blockchain pool.
One of the recent groups to add their name to the list is the Illinois Department of Financial and Professional Regulation. It just announced it has recently joined the R3 blockchain consortium. In its involvement, the Illinois regulator will be responsible for working with 80 financial institutions of R3’s membership to build out secure and scalable blockchain-based applications.
Among its R3 counterparts, Illinois will be joining the Bank of Canada and the Securities & Futures Commission of Hong Kong. In addition to being the first Chicago-based exchange to join the consortium, this is also the first time a U.S. regulator has joined its fold.
As we reported earlier this week, the U.S. SEC denied the Bitcoin ETF fund. So Illinois’ decision to join the R3 blockchain consortium gives hope to blockchain technology’s growth in the states. Bryan Schneider, Illinois’ regulator secretary, commented on blockchain technology to Reuters, saying that blockchain has the “potential to dramatically lower transactional costs, automate manual processes and reduce opportunities for fraud and risk.”
The big issue facing financial institutions in the U.S. now is whether or not blockchain technology will work with the current financial standards in place. As the United States’ financial policy framework is vast and extensive, it’s likely that we’ll see various pieces of legislation debated with great heat over the next five to ten years.
With the amount of connected technologies in the hands of consumers enabling cross-border payments and blockchain’s pervasiveness in countries outside of the U.S., there’s a chance that this is just the tip of the financial revolution iceberg.