The Bitcoin craze has hit the Capitol as an Illinois House subcommittee was formed to explore the state’s policies toward the decentralized digital currency and others like it.

Though the Illinois Department of Financial and Professional Regulation currently does not consider such digital currencies valid, lawmakers believe with the proper measures, digital currencies and blockchain technology can have many benefits, such as making state government more efficient.

State Rep. Jaime Andrade, D-Chicago, chairman of the Cybersecurity, Data Analytics and IT committee, said the subcommittee may look to see if some regulation is necessary, but the main goal is to create an environment that “allows and fosters this technology.”

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“I learn something new (every time I look at the topic),” Andrade said. “And that’s the point of this task force.”

Digital currencies like Bitcoin have risen in prominence in the past decade. Unlike traditional currency, they are not backed by a central banking system or a single administrator. Instead, decentralized digital currencies rely on peer-to-peer transactions recorded in an online ledger. In layman’s terms, it is a way to conduct transactions without a middle man, such as a bank.

Blockchain, on the other hand, is a database that maintains a growing list of records. It can be used to record digital transactions and avoid duplication.

Rep. Mike Zalewski, D-Riverside, who will chair the subcommittee, said the hope is to examine the issue closer.

“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. My hope is we can understand whether Bitcoin is the right investment or a risky gamble, and create policy that puts consumers first.”

In addition to the subcommittee, Andrade said the Illinois Legislative Blockchain and Distributed Ledger Task Force — created last year to study how and if state, county and municipal governments can benefit from a blockchain-based system for recordkeeping and service delivery — will release its report in a few weeks.

No hearings have been scheduled yet for the new subcommittee.

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