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The Royal Canadian Mint’s fledgling digital currency program, MintChip, has been acquired by local startup NanoPay which has plans to commercialize the technology this year.
NanoPay, which has developed a mobile payment service it says is similar to Apple Inc.’s “Apple Pay” system,
MintChip digital currency acquired by NanoPay
acquired MintChip from the Mint in December for undisclosed terms, NanoPay Chief Executive Laurence Cooke told The Wall Street Journal. The parties were in talks for the deal for almost a year, he said – according to the WSJ.
Amid a surge in interest in virtual currencies, the Mint, a for-profit entity owned by the Canadian government which produces coins for Canada and other countries, began developing MintChip in April 2012 for use in small online payments. However, it put the assets on the block just two years later.
“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 of finance at the Royal Canadian Mint, in a news release set to be released Tuesday and viewed by The Wall Street Journal.
Much like bitcoin, the Mint intended for MintChip to be used as a digital cash product with an assigned value. Its backing of MintChip was notable in that it showed governments were taking digital currencies seriously at a time when investors were concerned about bitcoin’s volatility and use in illicit transactions.
As MintChip’s development stalled, bitcoin’s popularity rose, leading regulators in some countries to move toward legitimizing the currency. In October, Europe’s top court ruled that bitcoin must be treated like a currency for tax purposes.
Meanwhile, some major financial-services companies have invested in the technology that underpins virtual currencies. In September,Visa and Nasdaq joined a slew of investors in backing a startup that trades and transfers financial assets using the same technology on which bitcoin is based.
Mr. Cooke said nanoPay will use the MintChip technology to process cash payments in secure transactions. MintChip users will be able to transfer money from a bank account to a nanoPay app and pay for goods and services by tapping their phones at a cash register using near-field communication, he said. The executive said some Canadian retailers will support MintChip transactions, but declined to identify them.
“We’re pretty confident we can launch commercially in the next couple of weeks,” Mr. Cooke said, adding that nanoPay plans to release mobile apps that support MintChip transactions later this month on iPhone and Android devices.
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