From Gold to Blockchain – Casa de Moneda Chile Reinvents Itself for the 21st Century

Despite being the oldest company in Chile (it was founded in 1743), in the last four years the state-owned firm Casa de Moneda Chile (CMC) has gone, in the words of its General Manager Mauricio Roco, ‘from the physical to the cloud’.

The first product to come out of the CMC was a half-ounce gold coin with the image of King Ferdinand VI of Spain. This was in 1779, long before Chile was Chile. Throughout its history the institution has been dedicated to producing coins, medals and, more recently, banknotes (since 1914), licence plates, drivers’ licences, circulation permits (ie. vehicle permits) and smart cards. In the last four years it has added new lines of business, including a service for storing valuables in its vaults, and is eyeing the cryptocurrency and blockchain industry with interest.

The core business – that of producing banknotes and coins and safeguarding high security assets – will be maintained and strengthened. CMC – which has an annual capacity of 400 million banknotes following a major refurbishment and upgrade a decade ago – already exports banknotes to other Latin America countries, including Argentina, Uruguay, Venezuela, the Dominican Republic and Honduras.

Earlier this year, at the High Security Printing conference in Mexico, it unveiled a new house note printed on polymer, indicating a new direction for the company that has traditionally only printed on paper.

2009 was a key year for the company, as it was then that it became a public limited company, giving it the ability to venture into other industries and commercial activities. That didn’t mean that it ceased to be state-owned – the government-owned CORFO (Corporación de Fomento de la Producción) owns 99% of its shares, and the Chilean Treasury the remaining 1%. It did mean, however, a fundamental shift in corporate strategy, namely to produce profits, with a mandate to achieve surpluses for its shareholders.

General Manager Mauricio Roco.

It was this change to led to CMC to look for business overseas and compete for long-term contracts. ‘We are participating in tenders inside and outside Chile. These processes force you to be extremely competitive and clear’, said Roco.

In addition to the export of banknotes, the company has more recently ventured in R&D for other technologies. These include its ‘digital fingerprint’, one of its most ambitious projects with a series of potential applications in the future.

The fingerprint is, in simple terms, an ultra-secure digital chip backed up in the cloud that is unclonable and can be scanned by smartphones to verify the authenticity of a product/document, and trace it through the supply chain using blockchain technology and artificial intelligence.

The first application is for circulation permits. In 2018, more than US$30 million was being lost as a result of fake circulation permits. CMC started working with the districts of Colina and Estación Central, and to date has agreements with ten municipalities. So far, more than 1.3 million of the new permits have been issued.

At the time of printing the circulation permits, a digital twin is sent to a security technology platform in the cloud, which allows citizens, when buying or selling a used vehicle, to detect fake documents when scanning them through one click on the cell phone. Similarly, the technology provides a series of benefits for municipalities, such as traceability, document authentication, and georeferencing, whilst a sticker containing the fingerprint that is attached to the inside of the car’s windscreen can be scanned by the police, obtaining immediate information on the vehicle’s owner.

Another application, signalling a move into brand protection, is the use of the technology together with ProChile for the export fruit market.

‘We are moving from physical things to solutions in the cloud,’ says Roco, who adds that, in addition, they are ‘incorporating the latest technological developments in the manufacture of banknotes that exist in the world.’

One of those is cryptocurrency. Roco stated that it is being reviewed, and analysed, and he sees an opportunity for development. ‘In European countries, which are leaders in everything that has to do with digital solutions, both solutions coexist in parallel’, he said.

The same applies to blockchain technology, which runs in parallel, and which is already being used as the technology underpinning the digital fingerprint on circulation permits.

One of the most ambitious projects the company is currently undertaking is with a European institution. CMC is keeping tight-lipped about the project, but anticipates that it will be launched in 2023 and says that it isn’t a banknote or a coin, but a purely technology project.

A new cryptocurrency, perhaps?