The future of digital money is being showcased at the industry’s 3rd Regional GovCFO Forum Australia being held Monday 2 December in Canberra. Among the international speakers, Mr Marc Brûlé, chief financial officer at the Royal Canadian Mint, discusses the Ottawa-based Mint’s digital money initiative.
Mr Brûlé is currently involved in the government-owned Mint’s digital money pilot. This initiative taps into the expertise of software developers, with apps for consumers, as well as government and industry bodies.
Under an awards programme, the Mint’s work with developers involves apps that can run on Android, Blackberry, a desktop or mobile browser, or Windows. Developers are required to create proofs-of-concept highlighting the potential advantages of digital money. This technology is characterised as a next step in the evolution of paper money.
Among the features, a secure circuit chip, holding an electronic value, can be stored on Sim cards, USB sticks or remotely in the cloud. Transactions do not necessarily identify an end-user, as such, offering the same options as with exchanging traditional cash. Transactions utilise a secure protocol, enabling the transfer of a value from one chip to another, and ensuring the integrity of a transaction.
Digital currency, still in its nascent stages, offers a convenient alternative to traditional currency. As a start, it can be offered for small-volume transactions. More immediate apps involve paying for a gift or services, and or settling debts. In the long term, the advent of digital money integrates the benefits of electronic payment and transactions in a fully-regulated virtual economy,
Alternatives to paper money
Banks, governments and financial circles are taking a wait-and-see approach to digital money. But this platform may revolutionise the way governments and industry does business in a global economy, while offering new and innovative ways to use non-traditional currency.
As a “digital representation of money,” this offering taps into the fast-growing demand for mobile technology, including an anywhere, anytime use of smartphones and tablets
Industry analysts note that digital money potentially lowers the cost of running a domestic or international money supply, especially for governments. It may defray the cost of printing money, while tackling marketplace volatility. For end-users, these transactions eliminate having to pay credit card fees.
The Royal Canadian Mint continues to test and refine its digital money project. The focus is on promoting the unique attributes of digital cash that could be issued by trusted custodians of a national currency system.
Transform payment systems
Earlier, under a broader review, the Canadian government released a Task Force for Payments System Review. This review sought to transform Canada’s payment system, with a closer look at digital apps.
Canada’s payments system needs to keep pace with a fast-changing digital economy, according to Mr Pat Meredith, chairman of this review. He said that innovative players challenge the existing payments infrastructure. “Smart phones bring the promise of instant digital transactions to our fingertips.”
Mr Meredith noted that mobile payments “are exploding” in countries less affluent than Canada, This contrasts with Canadians still reaching for change to feed parking meters, while citizens elsewhere do the same with the tap of a cell phone or a text message.
Phase out traditional payments
Canadian businesses, especially small and medium-sized ones, still rely on paper-based payment and invoicing systems. In Europe, phasing out older, paper-based payments is yielding immediate economic benefits. The transition from paper to new alternatives promises to revitalise Canada’s economy.
Under wider reforms, the Canada government is analysing payment innovations worldwide. This includes mobile and contactless payments, as well as integrated electronic invoicing and payments solutions. Policy planners are assessing digital identification and authentication projects.
Canada’s patchwork of laws and codes affecting payments are being assessed, apart from comparisons with governance models worldwide.
International speakers at the GovCFO Forum Australia will represent key organisations from Canada, the UK, Denmark, Singapore, New Zealand, and North America.
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