It is a great idea - to replace the expensive cash transactions under $10 by chips holding the cash digitally, but it is expensive to set up the infrastructure and make it work. RBS/NatWest spent a bundle on this in the 1990s with Mondex with no impact.
Nevertheless, it still a great idea and one of the inventors of Mondex, Dave Everett, a British cryptographic expert has been hired by the Royal Canadian Mint to develop a new system, MintChip.
It is envisaged that the MintChip could enable paying someone back by tapping phones together, scanning a QR code to donate to charity, or clicking to spend cents on an online article. MintChip emulates the positives of cash — payments are anonymous and don't require a bank — but work electronically. Value is recorded on chips within USB sticks or on MicroSD cards in phones, tablets or other devices. Value is transferred between chips for low, or no, transaction fees.
The experiment is interesting because of potential to reduce costs, they just have to make it work. Good luck to them.
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