Mint sells off digital payments platform
Bitcoin-like MintChip to go commercial
• MintChip, a digital cash platform created by the Royal Canadian Mint, has been sold to a private loyalty and payments company, nanoPay Inc., which plans to roll it out commercially this year.
Terms of the transaction to be announced Tuesday were not disclosed, but sources said the Royal Canadian Mint will recover the investment made in developing the technology.
The Mint hatched the idea of creating a digital cash platform in 2012, the same year it phased out the penny, at a time digital currencies such as Bitcoin were taking off.
The technology, dubbed MintChip, was designed by British cryptographer David Everett and tested as a means to transfer cash digitally between two parties with no intermediary.
Despite the initial fanfare around the Canadian Mint’s digital currency, it emerged in 2014 that the Crown corporation and the federal Department of Finance were exploring selling the MintChip assets rather than seeking to develop them beyond initial small-scale testing.
In a statement, Bob Zintel, senior director of Finance at the Royal Canadian Mint, said this week’s sale to Toronto- based nanoPay will move the technology, along with its five patents, “to its natural next step of commercialization in the private sector.”
The buyer i s an earlystage fintech company that has developed single- use transaction tokens that combine payments and loyalty rewards, with merchants able to collect and use anonymous customer data.
Laurence Cooke, t he founder and chief executive of nanoPay, said the existing business will be complementary with the development of MintChip, which uses “secure asset stores” in the cloud to move funds between parties without a central authority.
Unlike Bit coin, a platform that hosts a created currency that is not backed by any nation or government, MintChip is designed for governmentbacked, or fiat, currencies. However, Cooke said it could be adapted to handle loyalty rewards as well.
He said nanoPay plans to initially introduce MintChip commercially using Canadian currency, which has already been tested on a small scale for six months by t he Royal Canadian Mint. If all goes well, U.S. and British currency could be added.
In an effort to increase acceptance and broker wider use of MintChip, nanoPay has initiated talks with banks, retailers, telecom companies, and firms that provide payment- processing services to merchants, Cooke said.
The fin tech firm aims to make money by taking a small, fixed fee for each transaction that uses MintChip.
“Our focus is trying to replace cash, and cash is quite expensive for retailers,” Cooke said, adding that MintChip would significantly reduce the costs associated with protecting, counting, and moving cash.
Current clients of nanoPay are mainly convenience store operators, and Cooke said the acquisition of MintChip has prompted the firm to seek a financing partner.
He hopes to be able to announce that partnership by February.
When MintChip was rolled out, it was billed as an i nstant, private, and secure digital c urrency, with the regulator- friendly backing of a government. But the concept drew some detractors, who said a key benefit of a crypto- currency such as Bitcoin was lost in a centrally controlled digital currency that is subject to a country’s monetary policy.
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