Last week, Canada's finance ministry announced the country would soon no longer be distributing the country's one-cent piece, effectively killing the penny. Now, in yet another sign that money is transitioning away from physical currency, the Royal Canadian Mint, the government-owned corporation that produces Canada's coinage, is set to launch MintChip, a digital form of currency that enables value transactions in the cloud.
In other words, Canada has essentially just launched its own version of BitCoin. "MintChip brings all the benefits of cash into the digital age," according to MintChip's website. "Instant, private and secure, MintChip value can be stored and moved quickly and easily over email, software applications, or by physically tapping devices together." (Check out MintChip's video here.)
Details of the program are sparse—we reached out to the RCM, but haven't heard back yet—but it appears users are given a MintChip ID, and allowed to top up their accounts with funds. Users can exchange value with each other, or pay merchants via MintChip. The value will be stored on MicroSD cards, USB sticks, or remotely in the cloud, all for use by smartphones running Windows, iOS, Android, Blackberry, or on desktop and mobile browsers—that is, once the apps are created.
The news comes only days after RCM's chief financial officer Marc Brule criticized Bitcoin's solution. The problem, he told Reuters, was that Bitcoin was not backed by a credible source. "The system we would bring in would be backed by a fund," Brule said. "Bitcoin may work for the small group of people that believe in its value, but that could change very suddenly."
That's likely why the company is stressing reliability and longevity. "The Royal Canadian Mint has been a trusted and respected custodian of Canadian currency for more than 100 years,” Ian E. Bennett, CEO of the Mint, said in a press release.
The comparisons to Bitcoin only go so far. Bitcoin offers currency from a decentralized source, whereas RCM's solution is from a centralized authority. Bitcoins are also all stored in the cloud, whereas MintChips depend on hardware.
It's still a long way from this solution being implemented, but to kick things off the RCM launched the MintChip Challenge, a $50,000 competition to attract developers to create apps for the platform.