SBI Holdings's Crypto Smart Card Bet: Good or Bad Idea?

SBI Holdings’s Crypto Smart Card Bet: Good or Bad Idea?

Japanese financial heavyweight SBI Holdings’s cryptocurrency venture arm SBI Crypto Investment Ltd. has invested $15 million USD into Swiss crypto smart card developer Tangem. Will the investment prove successful?

Also read: Central Bank of Central Banks BIS Says PoW Crypto Needs New Tech

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Will Tangem’s Crypto Smart Card Angle Go the Distance or Prove Gimmicky?

As part of the Tangem’s seed funding round, SBI Crypto Investment Ltd., the venture arm of Japanese financial titan SBI Holdings, has invested $15 million to help the Swiss company achieve its goal of making cryptocurrency as accessible and easy to use as fiat money.

Tangem, touted as a maker of smart “banknotes” for cryptocurrencies, is technically a hardware wallet builder whose cards allow quick and inexpensive off–chain transactions.

A mockup for Tangem bitcoin banknotes released last year. Image via Tangem

However, Tangem’s crypto smart card wallets have shown some limitations to date, including users experiencing difficulties around pre-denominated notes, early versions being non-reusable, and the inability to backup private keys. 

And, while Tangem is a hardware wallet maker like Trezor and Ledger, its notes are card-like and can be used in direct physical transactions. That forward-leaning dynamic would seem to make them more susceptible to theft, just generally and speculatively speaking. 

However, commenting on the investment, SBI Holdings Inc. CEO Yoshitaka Kitao said that Tangem’s smart banknotes could indeed play a crucial role in the mass adoption of cryptocurrencies, i.e. by putting crypto out in front of the mass’s faces. Kitao also said the cash injection into Tangem will help “stipulate the demand for other blockchain services provided by SBI.”

As part of expanding its crypto portfolio, SBI Crypto Investment Ltd. has also ventured an undisclosed amount into a Swiss-based mobile crypto wallet developer Breadwinner AG.  

Of course, Ethereum co-creator Vitalik Buterin has previously said that putting crypto cards in “corner stores” might be the best way to spurn mass adoption. Tangem’s crypto smart card wallets are a stab in that direction. On the other hand, skeptics will say that crypto needs to transcend toward newness, not emulate the money of the past.

And another aspect to consider is if cryptocurrencies eventually fall by the wayside because they can’t beat out their more centralized counterparts, e.g. cash, cards, payment apps.

It remains to be seen what will happen, but for their part SBI has put a $15 million bet down, so they’re clearly comfortable with the Tangem vision. Let’s see if it it can pan out.

Looking Backward, Looking Forward

Last year, as part of a pilot Tangem launched its first smart bitcoin banknotes, in denominations of 0.01 and 0.05 BTC, in Singapore. The company has since stated on its website that its first million bitcoin banknotes have entered circulation as of 2018.

However, the company has offered little public commentary regarding that Singapore pilot to date. 

Meanwhile, as to the latest cash injection from SBI Crypto Investment Ltd., Tangem plans to direct the funding toward further expansion of its crypto smart card devices to new sectors where the use of digital currencies is blazing new paths.

Some of the new areas Tangem is eyeing for expansion include Initial Coin Offerings, digital identity, stablecoins, retail loyalty programs, and ticketing.

“We take the next big step on our mission to bring blockchain to people’s everyday life,” company co-founder Andrey Kurennykh said on the SBI investment.

“With this additional investment in 2019, we will be able to extend our product offering in other industries and provide better support to companies which embrace the idea of the physical distribution of blockchain assets.”

What’s your take on Tangem’s crypto smart card concept? Is it a winner, or will it struggle long-term? Share your views in the comments section below.

Images via Tangem

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