Canada may launch government-backed bitcoin competitor

Canada may launch government-backed bitcoin competitor

Writing last year on the peer-to-peer digital currency Bitcoin, I noted that while "the disruptive power of Bitcoin on banks and central governments has surely been overstated, but these institutions might be better served to take its emergence as a warning rather than a reassurance: They may not be the only game in town forever."

It seems that at least one country is taking the Bitcoin phenomenon seriously: Canada. The Canadian mint is launching research and development on its own "virtual currency" with the tasty-sounding name MintChip. Jesse Brown of MacLeans explains

Like BitCoin, it’s as anonymous as cash, leaving no electronic record of who paid what to who.  Unlike BitCoin, it’s backed by a central authority, which is bad news for the anarcho-crypto Illuminati-fearing libertarian crowd, but good news for people who actually use it. Will it be hacked? Probably. But a currency guaranteed by a wealthy and stable mint can sustain a certain amount of fraud without collapsing.  The Royal Canadian Mint has launched an app challenge to kickstart MintChip. 

I suspect that a lot of potential users — not just "the anarcho-crypto Illuminati-fearing libertarian crowd" — are going to wonder just how anonymous a government-backed electronic payment method will be. I’d imagine there will be at least some safeguards to prevent the underground drug markets that have given Bitcoin a bad name. 

Whatever happens, it should be an interesting experiment to watch. This is been a month of currency innovation for Canada, which announced it was eliminating the penny last week. It still has a ways to go to catch up with increasingly-cashless Sweden though.

Update: I neglected to mention the glow-in-the-dark dinosaur coin. The hits just keep coming from those wild and crazy guys at the Canadian Mint.