SmartMetric's Secure Bitcoin Storage Card Has Payments Potential
SmartMetric Inc. is launching a Bitcoin card protected with biometric fingerprint authentication. The card can be used as offline storage for bitcoins, but in the future it might also be used for payment.
Bitcoin, a virtual currency, exists as data tracked through a public ledger. Since individual bitcoins can be stolen by hackers if kept online, some bitcoin users prefer "cold storage," the process of storing their bitcoins on a device that is not connected to the Internet.
"We're taking our biometric card technology and then using it to store bitcoin to make Bitcoin more usable in the real world," says Chaya Hendrick, president and CEO of SmartMetric. The Bitcoin card "is a highly secure and portable platform for bitcoins."
The Bitcoin card houses an EMV chip, making it possible to someday use at any merchant who accepts EMV payment cards. The company is working on a way to convert bitcoins in the card to a stored value so it can be used at the point of sale, Hendrick says. The card comes with a USB adapter, Hendrick says, so the bitcoins on the card can be transmitted to a computer and spent online.
But, in enabling payments, SmartMetric would almost certainly fall under regulatory scrutiny and need several payment and banking partners.
The card stores a bitcoin wallet address, much like many mobile apps do. Because the user's finger would have to be swipe over the card before the EMV capability is activated, the bitcoins stored are usually inaccessible until a purchase needs to be made.
Hendrick expects initial adoption in Europe, Asia and parts of Latin America because those regions have more widely adopted the EMV standard. But the U.S. is currently in the process of migrating to EMV, so the Bitcoin card "could become a common placeholder in the next 18 months," Hendrick says.
Despite recent regulatory and legal uncertainties, MasterCard Inc. said this week that it intends to stick to the October 2015 EMV deadline. Visa Inc. has yet to say whether it will commit its timeframe or postpone in light of recent setbacks.
SmartMetric's cards requires users to swipe their fingers over a thin film for authentication. These are an alternative to area sensors, which are vulnerable to being tricked by copied fingerprints, Hendrick says. SmartMetric's sensors also detect body temperature and pressure to counter spoofing, he says.
The company plans to launch the Bitcoin card in the first quarter of 2014. SmartMetric is not yet releasing pricing details.
Other Bitcoin plastic cards use the prepaid model, allowing users to exchange their bitcoins for a national currency before the value is spent. Gyft, a mobile gift card company, lets consumers buy its cards with bitcoins. Bitcoin Ventures Inc. released the CoinTap card in August 2013. The card can be bought at retailers with cash and then used on Bitcoin Ventures' website to obtain bitcoins.