Loyalty Pays Holdings has purchased all assets related to the once defunct Royal Canadian Mint project, MintChip.
MintChip represents a digital currency developed by the Mint meant to be similar to cash. Royal Canadian Mint began developing the technology after the digital currency Bitcoin had gained global attention. The new owner of the technology, nanoPay, has purchased a technology much different than Bitcoin, however; MintChip offers support compliance of regulatory standards, including anti-money laundering (AML) and know your customer (KYC) laws. MintChip can be denominated in multiple national currencies and value can be transferred without intermediary, both offline and online.
“This transaction, which was conducted through an open, transparent divestiture process, allows MintChip to move to its natural next step of commercialization in the private sector,” said Bob Zintel, Senior Director, Finance at the Royal Canadian Mint. “Canadians can now look forward to the evolution of MintChip as nanoPay explores the full potential of this digital payment technology in the global marketplace.” NanoPay is excited about the new technology they’ve acquired.
“Digital currency is inevitable and our newly-acquired MintChip platform delivers a digital cash future to consumers, businesses and governments today,” said nanoPay Founder & CEO, Laurence Cooke. “Digital cash will transform payments globally, from the unbanked to the largest financial institutions, and MintChip will help easily transition to the reality of cashless payments.”
MintChip was used by RCM in a six-month internal trial. The technology has been granted five patents, with five additional patents going through the patent process. The platform is fully functional today and will be commercially deployed in the coming weeks.
NanoPay’s next pursuits are expanding partnerships with central banks, commercial banks, telcos, acquirers, and retailers so as to further the use of the technology.
RCM made headlines in 2013 when it introduced its MintChip project. That year, software engineers at the 105-year-old Crown corporation will commence testing its very own digital currency.
At the time, they stated that MintChip “has the potential to revolutionize how we do business.”
“Where we’re going is not a road that has been travelled,” said Marc Brûlé, who heads up RCM’s virtual money project.
“The challenge for most companies trying to do this is they are not a federal mint,” said Catherine Johnston, chief executive of ACT Canada, a payments industry advocate. “What they’re really doing is giving a digital representation of money, and it really requires a federally regulated body to be able to do true digital currency. So I see the Mint as having everything they need to make it a reality.”
MintChip can be held on a smartphone or other electronic device. “We’re at the very beginning of this, you know. But I believe that smartphones are very powerful devices and very popular. You miss your wallet in a couple of hours but you miss your smartphone in minutes,” Mr. Brûlé said when the project was first announced.
Little is know about the security protecting these wallets, but the MintChip project was originally going after micro-transactions and is expected by officials to be adopted by the underbanked. The MintChip is designed to be a digital form of cash and change. The Mint maintains that MintChip maintains “the capability for anonymous, efficient and almost instantaneous transactions.”
Compared to physical cash and change, the Mint argues, the cost of managing MintChip is much lower.
“It will be fun to watch it but i don’t think we will see anything substantive from it.,” Trace Mayer said about MintChip when it was first announced. “Anything MintChip can do, Bitcoin can do, and we can do it securer because we have the processing power to do so.”