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The Royal Canadian Mint Wants To Remake Currency With MintChip

MintChipRecently, fascinating news was released about Canadian currency. Yes, stopping the minting of Pennies was a big (and international) news item for many. But, the bigger news for us appears to be a new kind of currency called MintChip. The recent news revolves around a new challenge to create a smartphone application and/or make use of a new API. What I’m curious about is more about this new currency and what it means for Canadians.

A little about the penny. The mint will stop making the penny later this year and, citing a 1.6c per penny cost, will pull the lowly penny out of circulation through holding them back at banks. I would expect the penny will start disappearing in a few years and people need to start rounding purchases because of a lack of pennies. Online and electronic transactions will still be done the same way with dollars and cents included. Some have mentioned fears about rounding up transactions unnecessarily and I think, for the most part that will happen if retailers can take advantage of it.

Within hours of the penny announcement comes the MintChip challenge. The Mint has released a set of API documents and a contest that could net a developer could $50,000 for the effort. I was really curious what this was all about, but first, take a look at a video that describes MintChip.

Update: The winners were recently chosen and the Windows Phone application MintWallet wins best overall application honors.

So, MintChip does appear to support a number of different currencies. And, being simply a chip, it would appear to be what money is – anonymous (to a degree). The person with the money holds the money, you generally can’t look at a coin and tell where it’s been. Money can be used for all sorts of things – good and bad (a drug user likely wouldn’t buy weed with personal check). So, if MintChip stored information about transactions and history and ownership, I would consider that very troubling. The interesting part of this is the idea of a hosted MintChip provider. Would that be considered the banks?

It seems like an odd time to release something like this, what with many other payment services vying for a share of this market. That also might make it the perfect time. Electronic payment system need legitimacy and this system might do just that. There are electronic payment alternatives popping up everywhere. I’ve even seen comparisons between this and Bitcoin, an open source peer to peer payment platform.

Another interesting question here is the implications for transportation of money. Does something like this make it easy to transport (or even smuggle) money across borders? How long would foreign countries take to support this type of technology? Are these chips going to support RFID, NFC? Could this technology make way for biometric implants under the skin? Being electronic in nature, could a person throw one of these chips (with say, $10) into a jar and thirty years later – retrieve it and use it? You can do that with money. Then, the bigger question of infrastructure is unknown. This isn’t like the Interac system since the systems that take cash are much more involved and entrenched. Try rolling up to a small town nomadic carnival in a local parking lot and using anything but cash.

Lots of questions indeed. I look forward to finding out more about the Canadian Government’s plans for this kind of technology. If you could put a chip in your pocket that is accepted everywhere, would you do it to save from having to carry cash?