Safe Cash Payment Technologies, a blockchain-based digital cash platform that will enable consumers to purchase digital tokens in exchange for cash, has raised $1.12m in seed funding.
The San Francisco-based company procured funding from investors including InfoSpace founder Naveen Jain, who said the platform was “on to a very disruptive idea”.
Speaking to CoinDesk about the platform, which uses a litecoin-compatible private blockchain and is expected to launch early next year – Chris Kitze, the firm’s CEO, said:
“Our platform is a permission-based blockchain that’s licensed to and controlled by banks. We are a technology service provider for banks and we don’t handle any money – that’s up to our bank partners, licensed money businesses and licensed exchanges.”
Collateralised tokens
The digital tokens, Kitze said, are 100% collateralised. “This means each token that represents $1.00 has exactly $1.00 stored in a bank.”
He continued:
“For digital currencies that have fiat interchange, they [the digital tokens] have to be created and operated by a bank for legal reasons. It’s also possible to create tokens for loyalty or private currencies, and we have been testing this with a company based in Iceland for the past six months.”
When asked about how the transactions would be processed at the point of sale, Kitze said that just like bitcoin, each party would have a secure wallet and the transaction would be recorded on the blockchain.
The recipient, he added, would receive a confirmation in his or her wallet in less than 10 seconds and would then be able to re-send these tokens.
Reducing friction
Kitze believes there is demand for such an offering as there is currently too much friction in small transactions, noting the US banking system’s inefficiencies.
There is currently no simple and fast way, Kitze claimed, to send small amounts of cash electronically across borders and between different systems with final settlement in less than 10 seconds.
He continued:
“That’s really what we are targeting – removing the pain and friction from these kind of transactions for consumers and merchants. We think this will open a lot of things that are not possible today.”
Although Kitze declined to reveal the platform’s banking partners, adding that these would be disclosed later this year, he claims the platform’s focus on the mainstream banking world is what makes it unique.
Ripple and Hyperledger – the latter was acquired by Blythe Masters‘ firm earlier this summer – he added, could be seen as Safe Cash’s main competitors, but Safe Cash, he said, attempts to take things further.
“While these companies have done a good job to get the technology to where it is today and create awareness, things are about to move from the pioneer to the settler phase,” he concluded.
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