Amazon's New Digital Currency Rollout Raises all Kinds of Questions
Could the U.S. dollar be going the way of the German Deutsche Mark, the French franc and the Austrian schilling? In 2002, when the euro was introduced as the official currency of the European Union, each of those currencies was officially retired. Perhaps one day the worldwide universal currency will be Amazon’s newly “minted” Amazon Coins.
Last week, Amazon announced it would roll out its new digital currency in May with one Amazon Coin being equal to one U.S. penny. For now, Amazon Coins will only be valid to purchase apps, games and in-app items for its Kindle Fire tablet, but this initiative could easily be a precursor to a full-blown digital currency for use across all of Amazon’s storefronts. Going one step further, it’s not impossible to imagine a day when Amazon Coins might be used by other online retailers as a form of currency with their own exchange rate and intrinsic value.
It’s fair to say we’re a long way from this reality at this point. After all, Amazon is going to give away millions of coins for free when it launches the program. But the groundwork for this future has already been laid. Amazon has a Web Services API that allows other online merchants to use its payment processing solution for any customer that has an Amazon account. It wouldn’t be tough to also tie this program to Amazon Coins.
In the meantime, the rollout brings up all kinds of other interesting questions. Is this a strategy by Amazon to get their users to spend more? Plenty of studies have shown that when people purchase things with forms of payment other than cash they are likely to spend more. If it grows in use and application could this digital currency face regulatory issues? Do our current laws even address this type of system? We’ll find out the answers in time, but what we do know is that the company who revolutionized online commerce is at it again.
What do you think? Will we all someday be using Amazon Coins instead of pennies, quarters and dollars?
Photo via Photopin/J Bowley
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