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 The Illinois House unanimously passed a bill to allow financial service
companies that operate using cryptocurrency to apply for a charter in Illinois.
If the bill becomes law, Illinois will be the second state to allow the
practice.
“Our state has the opportunity to lead the way on blockchain technology and
cryptoassets, which could make Illinois a hub for innovation and
entrepreneurship for future generations – and all the jobs that come with it,”
said the bill’s chief sponsor, state Rep. Margaret Croke, D-Chicago.
House Bill 3968 has the support of the Illinois Bankers Association, the
Chicagoland Chamber of Commerce and other banking organizations that signed on
in support of the bill. It is now before the Illinois Senate.
Illinois would be the second state in the nation to allow special trusts to hold
digital assets after Wyoming, which drew digital asset bank Avanti and
cryptocurrency exchange Kraken to the state with a similar measure in 2019.
The digital asset industry has grown steadily in recent years with the
skyrocketing value of cryptocurrency, such as Bitcoin.
An Illinois Blockchain Business Development report produced by the Illinois
Department of Financial and Professional Regulation in December stated worldwide
investment in blockchain technology startups jumped from just $1 million in 2012
to $4.15 billion dollars in 2018, enticing thousands more to enter the market.
The market value of all cryptocurrencies stands at about $758 billion, according
to Statista.
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But many digital asset companies have found banking
with traditional institutions difficult given the significant cost
to startups.
HB 3968 would lend stability to the industry by allowing financial
technology companies to offer the same financial products as
existing trusts, such as banking and payment services, in addition
to other digital asset services, sponsors said.
Traditional financial institutions in Illinois have also voiced
support for the bill, stating consumers will benefit and that
boosting fintech and cryptocurrencies will drive positive economic
growth.
“Illinois has every right to win in blockchain, given that we are a
unique intersection of financial hub and real-economy hub
(manufacturing, logistics, agriculture, etc.),” Outlier Ventures
partner Rumi Morales told Payments Dive. “If we connect digital
payments innovation to those sectors, the potential is huge.”
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