(The Center Square) – Federal and state officials want to take a deeper dive into the future of digital currencies and the backbone of what makes them work.
Digital currencies like Bitcoin work on what’s called the blockchain. That’s a distributed digital ledger U.S. Rep. Bill Foster, D-Naperville, says is non-falsifiable.
“Something that you cannot go and make a counterfeit copy of something that’s already been published on the blockchain,” Foster said. “And so that will prevent a lot of document fraud.”
With China’s central bank looking at its own digital currency, Foster is pushing for Congress to investigate making a digital dollar in cooperation with the Federal Reserve central bank.
“The United States is playing catch-up to the rest of the world when it comes to digital currency, and if we’re going to protect the U.S. dollar’s status as the world’s reserve currency, we need to make development of secure and effective digital currency a priority,” Foster said in a statement.
In an interview, he said decentralized digital currencies like Bitcoin are facilitating illicit actions.
“One of the border patrol agents told me that most of the payments made for human trafficking are now being made with Bitcoin, simply because it was not legally traceable,” Foster said.
Michael Busch, president and CEO of Burling Bank in Chicago, said what he’s seen with digital currencies, the ledger is transparent and accountable. He also noted the U.S. dollar is being used for nefarious purposes.
“While we always have to be wary of bad actors, we can’t let those concerns deter us from providing safe and sound products and services to compliant businesses,” Busch said.
Busch advocates for policies to foster the growth of blockchain technology in Illinois.
Illinois lawmakers last month heard from Illinois Department of Financial and Professional Regulation’s Chasse Rehwinkel about how such blockchain technology continues to be adopted by other states.
“Blockchain technology is not just being applied to financial institutions, but also it’s being looked at for government, healthcare, transpiration, different logistics issues, retail, travel and many other industries,” Rehwinkel said.
IDFPR produced a report at the end of last year with various recommendations Illinois could implement to foster blockchain technology and digital currencies.
“There is no general consensus among domestic regulatory bodies at either the state or federal level,” according to the reports. “However, certain states are making inroads in how to regulate this industry. Allowing banks and financial institutions to act as legal custodians for crypto-asset clients seems to be the regulatory path that both industry advocates and regulators want to pursue.”
