Canada ready to test its own digital system for money transfer

By the end of 2013, the Royal Canadian Mint will implement a pilot project called MintChip that could facilitate easy digital money transfers.

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Canada ready to test its own digital system for money transfer

By the end of 2013, the Royal Canadian Mint will implement a pilot project called MintChip that could facilitate easy digital money transfers. The project was first announced in April 2012 but has long been shelved. Now, the Mint seems to be working on v2.0.

MintChip itself is not any kind of currency but a digital storage for Canadian dollars. It would allow digital cash to flow easily between users.

The value of the cash on a MintChip would be created in the Mint, just as it does with coins, then communicated to brokers. Users would buy chips from a broker and load them with some kind of unique ID.

Payment requests would be made by sending that unique ID to another chip along with a value for the amount to be transferred. In this respect, it resembles Bitcoin somewhat.

The chip sending money would create a digital-signature encrypted value message, and this would be verified against a public certificate.

A MintChip could be integrated into phones, USB sticks or any other compuer. MintChip accounts could be hosted, as well, by third-part service providers.

While tantalizing, critics point out that MintChip is still a centrally controlled technology, so the privacy of Bitcoin’s money transfer would not be possible. It’s better to think of it as digital Canadian cash, perhaps.

Which is great for Canada. A report issued in 2011 called for an overhaul of the country’s payments systems, noting that EU and BRIC countries were way ahead of Canada in adopting digital payments. The report said a modernization of payment systems could increase GDP by up to 2% annually.

At the moment, online and in-person debit payments in Canada use Intertrac, though Visa and MasterCard payment systems feature single-tap payments. Google Wallet, however, is not yet permitted.

According to that 2011 report: “[Consumers] also want to pay bills online, only to find out that processing takes days, often resulting in unwarranted late chargers…”

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