“Money as we know it today is fine, but tomorrow is another story,”
said J. Marc Brûlé, vice president of finance and administration and
CFO of the Royal Canadian Mint, as he explained the RCM’s new digital
currency, called MintChip.
During the lead presentation May 7 of the 27th Mint Directors
Conference in Vienna, Austria, Brûlé outlined the growth of the project.
MintChip is “mobile commerce meets social commerce,” he said.
Anonymity is promised, but Brûlé concedes that no one has yet
determined what amount of money could be loaded onto the MintChip and
what maximum payment size would be permitted in transactions using the
system. MintChip’s main benefit would be as a cost-effective option
for smaller transactions (micropayments), especially those under $1
(so-called nanotransactions), Brûlé said. “The ‘sweet spot’ is the $5
and less price point and it is online,” he said.
By 2015 an estimated two-thirds of Internet users will be located
in developing markets and 80 percent of their Internet connections
will be made through mobile phones.
MintChip is designed to be all inclusive, secure and respectful of
privacy; it is “currency agnostic,” Brûlé said, meaning that it could
be calculated in British pounds or Canadian dollars or any currency in
the world. Users might be able to make payments in different
currencies, but whether foreign currency transaction costs would be a
prohibitive barrier remains to be answered. “We’ll see — we’re having
discussions about that right now,” Brûlé said.
Just as with physical currency, owners of MintChip would have
certain flexibility. “You could take the chip out of one phone and
give it to a child to put into another phone,” Brûlé said.
But, parents of forgetful children might take note: there is no
replacement value to MintChip, he warned. “You lose the phone, you
lose the money, just like if you lost your wallet,” Brûlé said.
The Royal Canadian Mint’s involvement in developing the currency
is a natural evolution of its role as a currency provider, Brûlé said,
bridging the physical and digital economies.
“Our role is about getting a currency out into the marketplace,”
whether that currency is physical or digital, Brûlé said.
The RCM is aware that counterfeiting efforts would challenge any
new currency and Brûlé promised that the cryptography and chip behind
the currency would be upgraded every two to three years, to keep ahead
of the forces that want to topple it. ■