In an attempt to do away with physical cash, The Royal Canadian Mint has invited software developers across North America to test and challenge a digital currency technology and determine its applicability to the current marketplace.

The Mint, which recently said it will phase the Canadian penny out of circulation,  has developed prototypes and has five patents pending for the digital currency, called MintChip. The currency uses a secure chip to hold electronic value and a secure protocol to transfer electronic value from one chip to another and this value can be moved over email, software applications, or by physically tapping devices together, making it ideal for mobile payments.

Supported platforms are Android, BlackBerry, Windows and iOS.

“As part of its research and development efforts, the Mint has developed MintChip, which could be characterised as an evolution of physical money, with the added benefits of being electronic,” said Ian E. Bennett, president and CEO of the Mint.

The developer challenge will be conducted by ChallengePost and is open to software developers in North America to create innovative mobile payment applications using the technology.

According to the Mint, the initiative will test the robustness and applicability of the technology with industry experts and help to guide its further development.

[youtube]http://www.youtube.com/watch?v=9PX-vW4VccY[/youtube]