Next time you visit Canada, you might use digital currency to purchase your poutine, using something called MintChip backed by the Canadian government. The Royal Canadian Mint announced it’s getting rid of the penny and starting a new e-currency instead, and it wants the software community to help develop it.
The government just launched the MintChip Challenge — which was apparently so popular it’s already fully registered — to seek new digital payment apps for this new virtual currency. The idea is sort of a hybrid, combining the convenience of electronic transactions and the anonymity of cash. It will work via SD cards, but it will have no personal information or bank account data associated with it. It’s sort of like BitCoin but with actual, government-backed value.
The four-month contest includes 500 developers who will build apps that can demonstrate MintChip’s value. They’ll have to work on a variety of smartphone and desktop browsers. The prize: Solid gold wafers and coins worth about $50,000.
Its anonymity is a pretty unique idea. Other electronic payment systems — PayPal, Square, NFC-enabled phones, etc. — all connect to a person’s credit card or bank account. But cash is a great equalizer; you don’t need to have good credit to use it. MintChip would enable the same type of low-cost transactions for which you’d normally use cash. A Canadian banking group called Interac estimates that small-value transactions under $20 are worth $90 billion to the Canadian economy, the Toronto Star reported.
MintChip still has some kinks to be ironed out, including privacy, security of the currency and other questions. But it’s certainly an interesting concept.