Banking News

Softbank offers blockchain wallet on a debit card – fake news?

softbank blockchain wallet

Today SoftBank Card (SBC) announced a Wallet Card, a special kind of debit card which has embedded IoT chips to make it smart. It includes both conventional prepaid debit card functionality as well as a blockchain wallet – both a hot and cold wallet version depending on whether WiFi is enabled. Apart from WiFi, which can be switched on and off, the debit card includes a battery, programmability and a small on-card display.

Update: SoftBank has informed Ledger Insights that this is not an official SoftBank Corp announcement. We contacted SoftBank before publishing this article but did not receive a response until a day later. The email response from SoftBank states: “We are not aware of anything written on this article.” The SoftBank press department is still confirming from where the announcement was sent. End

US company Dynamics developed the underlying card technology and a version without the blockchain wallet was deployed earlier this year by SoftBank-owned Sprint. According to Crunchbase, Dynamics raised $110 million to date, with the last funding round in 2014. Mastercard is one of its investors.

SoftBank already issues more conventional prepaid debit cards. The Japanese firm says the Wallet Cards provided better security and access. It does so by leveraging its own encryption system and has multiple layers of encryption. We’ve asked for more details.

In addition to having the ability to disable WiFi, the card also has a switch to toggle between conventional fiat currency and digital currencies.

Curiously SBC states that the “electronic payment service eliminates the time for block confirmation”. In other words, it’s claiming that digital currency payments would be instantly final.

With public blockchain networks such as Bitcoin and Ethereum, the confirmation of blocks has a ten-minute delay built-in, which radically reduces its usefulness for payments. Furthermore, a transaction can potentially be reversed within several blocks. So far large payments people expect to wait 60 minutes plus, or ten minutes for smaller payments.

As an example, someone recently told the story of using cryptocurrency to book a room at a hotel which didn’t get confirmed in time. As a result, the person lost his booking, and the delay meant the hotel no longer had availability.

We’ve asked how the card avoids the block confirmation delay, and didn’t get a response by publication time.

SBC said “the SoftBank team is making a big break in the blockchain payment arena.”

Just two weeks ago SoftBank announced plans to merge with Line, Japan’s answer to WhatsApp, which runs the Japanese digital wallet with the biggest market share.

Historically Japan has been a country that prefers using cash for retail payments. But the Tokyo 2020 summer Olympic games has triggered a flurry of digital apps and digital currency activity in Japan. That’s particularly because of the expected influx of Chinese tourists who are accustomed to paying digitally. Alipay has inked several local deals.

We’re aware of at least three Japanese digital currency projects. Mizuho launched its J-Coin Pay app back in March. By May it said that 50 financial institutions had linked accounts into the app. MUFG also has been working on MUFG Coin and announced a GO-NET joint venture for payments with Akamai. And SBI is internally experimenting with its S Coin and also launched its Ripple-powered MoneyTap digital payments app with a consortium of banks.


Image Copyright: SoftBank