The digital bitcoin currency has completed the circle to paper money – thanks to a startup in Zug. Here’s the backdrop and the role of Singapore.
The name of the largest crypto currency wasn’t chosen by accident. The term «Bit» is taken from IT and is a unit measure of data, while «Coin» is obvious, so bitcoin describes a digital coin.
Bitcoins are a pure digital product, with transactions being conducted using the Blockchain technology via digital channels. This compares with the traditional paper money used by central banks and financial institutions.
The gap between bitcoins and paper money is now apparently being bridged by a Zug-based fintech called Tangem. The startup has launched a pilot project to sell physical bitcoin notes in Singapore, according to a statement released last week.
Radical Downsizing?
The notes are a type of card (see picture above), on which the bitcoin units can be stored. The denominations are 0.01 bitcoin (current value 93 francs) und 0.05 bitcoin, about 470 francs. The first bundle consisting of 10,000 bank notes, has already been produced and will be mailed from Singapore to distributors and partners around the world, the company said.
The goal of issuing physical bitcoin notes is to radically simplify the purchase, possession and spread of crypto currencies, while at the same time making them safer, it said.
Failed Attempts
It remains unclear whether the bitcoin notes can be used for payment to third parties like traditional paper money, and what happens when they get lost. To guarantee their authenticity, and detect forgeries, a chip made by Samsung will be integrated into the note, according to the release.
The Tangem project isn’t that new as several attempts have already been made. The best known experiment, according to the industry portal «BTC-Echo» (article behind paywall), is Casascius. The project failed in 2013 when the company was prohibited from selling physical bitcoins. Another example are the well-known gold-colored bitcoins made by Lealana, a Hawaiian company.
Ex-UBS Banker Involved
According to Tangem’s website, the firm was founded by the former head of UBS’s Moscow office, Anselm Schmucki, as well as two IT experts Andrey Kurennykh and Andrew Pantyukhin. One of the partners listed is the Zug-based legal firm MME, which specializes in crypto currency issues.
