The state of Illinois is making a significant push to be a leader in blockchain technology. In December 2016, the state launched the Illinois Blockchain Initiative. Illinois’ CIO Hardik Bhatt believes blockchain has the capacity to significantly improve government operations.
The Illinois Blockchain Initiative is a consortium of Illinois state and county agencies, including the state’s Department of Commerce and Economic Opportunity (DCEO), Department of Financial and Professional Regulation (DFPR), Department of Insurance, Department of Innovation & Technology (DoIT), and Cook County’s Recorder of Deeds.
In addition to Bhatt’s involvement, Blockchain activities in the state are largely overseen by the blockchain working group, which includes Jennifer O’Rourke, blockchain business liaison and deputy director of the Office of Entrepreneurship, Innovation, and Technology, DCEO; Mike Wons, chief technology officer of DoIT; Cab Morris, deputy director of strategy and operational performance for DFPR; Sunil Thomas, CIO of business and workforce cluster for DoIT; and Marian Cook, chief strategy officer for DoIT.
According to Bhatt, the working group meets on a weekly basis to monitor the state’s progress and discuss new initiatives and projects.
Illinois is currently working on six different pilots, which the state has divided into two priority tiers. In tier one, the DFPR is working on a health provider network that would let residents do things such as check their doctor’s licenses and insurance through an app. The Blockchain Initiative is also working on a way to track continuing education credentials for professionals such lawyers and doctors with the DFPR and the University of Illinois. The last pilot in tier one is defining a use case around digital identity. The initiative is working with the Department of Health to understand how birth or other vital records information could be documented using blockchain.
In tier two, the state is working with Cook County, the largest in Illinois, on using blockchain to facilitate property title transfers. Additionally, a process to record academic credentialing information is in the works with the state’s public universities. The last tier two pilot is a method to track renewable energy credits to follow trades in secondary and tertiary markets and eventual retirements. All but one of the pilot programs involve working with the private sector, with the remaining using the state’s existing open data portal program. According to Bhatt, the private sector partners are doing the pilot program work pro-bono.
In an interview with 21st Century State & Local, Bhatt discussed Illinois’ plans for blockchain, and how other state and local governments can get involved.
21st Century State & Local: How is the state of Illinois approaching blockchain technology?
Hardik Bhatt: We are in the exploratory stages of blockchain. We are looking into this so we don’t get blindsided. It’s a three prong approach–we’re looking at the economic development aspects of blockchain, understanding how to regulate the technology, and we’re experimenting on our own processes to improve government operations. We are taking it as an upcoming tidal wave of change that we have to processes.
We are making sure its not IT that’s leading the way. Instead, we want the business that’s working with us to say “this is where I think we can apply blockchain.” or “This is our problem and how can we apply this technology?”
The key questions we go with are:
- Do we have an agency buy in?
- Do we have a clear use case? Do we have enough data?
- Do we have a partner who will step up and help us?
The end goal is [return on investment], and making sure we can show this is why we did this pilot.
We are working with the National Governors Association (NGA). We recently met with eight states under the umbrella of NGA to talk about what is a smart state and how to take Illinois’ model and replicate it nationally. Blockchain is part of our overall smart state strategy, it’s not a one-off initiative for us.
21C: Why did the state of Illinois become interested in blockchain?
Bhatt: The Department of Insurance and the DFPR came to us at the DoIT and said “Our industry partners are talking about this thing called blockchain, and we don’t know what it is, but our partners are rushing towards it. Can you look into this and how to regulate it? It was already on our horizon and then at the same time our Department of Commerce started seeing a lot more entrepreneurship in this area. We now have a working group that meets on this on a weekly basis.
21C: For a lot of people, blockchain is still synonymous with bitcoin and somewhat shrouded in mystery. How do you educate other state officials on what blockchain really is?
Bhatt: I would say our state officials and staff understand blockchain, but we have been very simplified in our explanation of it. The way we explain it is if email is a way to use the internet, bitcoin is a way to use blockchain.
21C: Do you see blockchain catching quickly in state and local governments or do you think it will take time to gain in popularity?
Bhatt: I did meet with a few state CIOs recently and there are a lot of questions about blockchain, especially with us being a trail blazer. Blockchain is a foundational technology where you need mass adoption, and proper regulation. You need to have the rules defined. It is also a disruptive technology, but, because it’s a foundational technology, it’s going to take a while before it is widely adopted–I’d say 5-7 years minimum.
21C: How do you start using blockchain? What’s your advice for state CIOs currently sitting on the sidelines?
Bhatt: Find a business partner with a specific use case that would want to work with you on it, so you aren’t fighting the battle alone. I’d also bring a technology expert in who knows how to build a sandbox environment for blockchain–that’s what we use. Then, figure out if you want to use a public or private blockchain–in government you’ll probably want to use private so everyone doesn’t have access to it. Then just start experimenting. You can read as much as you want to about blockchain, but until you start using it, you can’t learn much.
To learn more about blockchain, read our primer for state and local governments.