Ready for use? The acceptance of Bitcoin by Amazon could shape the future of payments

Maybe Amazon isn’t really preparing to accept Bitcoin (BTC) as payment for its goods and services before the end of the year, and maybe Apple isn’t actually adding $ 2.5 billion in Bitcoin, even though both events were reported recently , they are not yet confirmed. The question remains: if the tech giants compromise, what impact will they have on the cryptocurrency and blockchain industries?

Would it drive the adoption of cryptocurrencies or would it revive Bitcoin as a medium of exchange? Would you endorse a digital asset seal of approval and discourage governments from cracking down on blockchain-based tokens?

“It would be a tremendous endorsement for cryptocurrencies,” said Kapil Rathi, co-founder and CEO of CrossTower, an institutional cryptocurrency trading platform, when asked if the rumors were true. “It would be a clear sign that there is significant demand for crypto from users for companies of this size to implement or offer as products.”

Ready for use?  The acceptance of Bitcoin by Amazon could shape the future of payments
Ready for use? The acceptance of Bitcoin by Amazon could shape the future of payments

The Amazon report comes from a British newspaper, City AM, which revealed through an anonymous Amazon insider that the e-commerce giant could accept Bitcoin before the end of the year. Amazon later denied the report, but Roman Beck, a professor at Copenhagen’s IT University, told Cointelegraph that even if it were true, it wouldn’t have a really big lasting impact on the sector.

“Amazon could have been a leading force in tokenizing the e-commerce industry,” said Beck, “and benefiting from its huge installed customer base on a global scale.” Build digital leadership in the emerging token economy. ” In his opinion, the company should have adopted cryptocurrencies two or three years ago.

Regarding social media reports, which are also unconfirmed, that Apple is buying $ 2.5 billion worth of Bitcoin for its corporate coffers, its first real foray into cryptocurrency, Beck was equally unfazed: “Some bitcoins into theirs Taking stock is something that many companies do. ”As part of their wealth diversification strategy. It’s no longer a big deal either. “

Taylor Monahan, founder and CEO of blockchain interface provider MyCrypto, seemed to agree with Beck regarding Apple. “In December 2020, we saw an increase in companies with Bitcoin on their balance sheets,” including electric vehicle maker Tesla. He also added, speaking to Cointelegraph, “Today it is remarkable when a company announces it has, but it is no longer a revolutionary fact.”

On the flip side, the Amazon messages, when they finally arrive, could have more ramifications. “Are you really using Bitcoin for goods and services? It’s still very unexplored, ”said Monahan.

Pat White, CEO of Bitwave, a provider of digital accounting and tax software, said that where there is smoke, there is fire. The tech giant’s rumors might be true, if not in their exact details, then in their essence. “I believe it,” he told Cointelegraph, referring to the Amazon report. While the company has denied it, it believes it is almost certain that it is investigating in this area. “To all important players [minoristas] They’d like to have their own currency for their platforms, “said White,” that’s exciting news. “

White also doesn’t think Amazon is late in arriving in the cryptocurrency space. “Amazon has to be careful,” he continued. As a public company, you need to explain what you will do if you make significant changes to your business. You have a bunch of problems that you need to solve first. How do you introduce cryptography into your accounting system, how do you explain changes in accounting to your examination board, etc.?

Plus, you’re probably not just considering Bitcoin. There are many types of cryptocurrencies that you could accept and you would need to keep an eye on all of them. I would need all kinds of wallets. In his opinion, “there are real challenges that companies have to overcome, especially since it is a public company”.

Greater acceptance for Bitcoin?

If Amazon accepted BTC and basically worked from a business perspective, it could add “extra standing” to Bitcoin and possibly other cryptocurrencies, Lawrence White, a professor in the George Mason University department of economics, told Cointelegraph academics at the Center for Monetary and Financial Alternatives from the Cato Institute. Arguably, this is “bigger news” for the industry than PayPal’s entry into the cryptocurrency market in October, which was widely viewed as a major event.

“It would be huge business,” agreed Pat White (unrelated to Lawrence White). Both Amazon and Apple could be “enormously important”, but he said for different reasons: “Amazon would trigger hearings in Congress,” he went on, and raised the question of whether we really have a corporatocracy, a system governed by corporations, become. “Though it would be incredibly bullish for the market,” he added.

There is another reason that Apple is important, Pat White continued. The company has one of the most complex supply chains in the world. “If Apple were to simplify its supply chain with digital assets, it would be a big deal. […] It could change the importance of the supply chain. “

Facebook was the “first driver”

Beck has a different historical vision. The tech giant’s spell “was broken when Facebook announced Libra / Diem,” he told Cointelegraph, adding, “That was it [señal] for big tech and other industries to prepare. Amazon is running late and is sure to have a market effect on bitcoin demand, but Facebook was the first to move. “As for Apple, and equally important, Alphabet, the implications are still unclear,” he continued. “But it’s fair to say that these two are late for the game.”

Rathi disagrees that Amazon’s timing is necessarily inadequate. “It would be relatively early on compared to the vast majority of companies,” he told Cointelegraph, and it would also make Bitcoin more viable as a means of payment, adding:

“It would give Bitcoin holders more opportunities to spend their BTC and thus encourage their use as a medium of exchange.”

Lawrence White of George Mason University agreed that Amazon’s acceptance of BTC could make the world’s largest cryptocurrency more viable as a medium of exchange, but only if people actually use it as such. Converting BTC to dollars and from dollars to BTC is not exactly an easy process these days. “When your income is in dollars and your expenses are in dollars, there seems to be a lot of anger and anger going on, so it’s not very popular,” he noted.

Overstock, for example, is an e-commerce company that started accepting payments in BTC in 2014. Sales in the first three quarters of 2020 were nearly $ 2 billion, according to the New York Times, but only “an average of between $ 30,000 and $ 50,000 a week came from the cryptocurrency,” Overstock CEO Jonathan Johnson told the newspaper to a relative Misery. Amazon would have to do a lot more to increase the importance of Bitcoin as a payment mechanism.

The point may be debatable anyway, as Amazon may not even accept BTC if and when it breaks into crypto space, Bitwave’s Pat White told Cointelegraph. “They probably want to develop their own currency, like a 2.0 gift card,” he added. That way, they can eliminate intermediaries like Visa which keeps 3% etc. Beck agreed that an “Amazon currency” that would allow efficient coordination and payment between machines is a more likely route for the company.

A less likely restrictive policy?

Conversely, what impact could the tech giants’ entry have on governments and regulators? If Amazon or Apple took a big step towards cryptocurrencies, it would be less likely that the United States could crack down on Bitcoin or other cryptocurrencies?

“Alan Greenspan allegedly once said that regulators cannot ‘go against the wind’ to cushion economic fluctuations,” Beck replied. In the case of the emerging token economy, “IT is the wind of change. […] Any regulator that maintains basic opposition to cryptocurrency tokens is doomed to fail. “

Lawrence White is not so sure that the authorities are really powerless on this. The government can’t ban BTC as long as it’s peer-to-peer, he told Cointelegraph, but “the government can ban it from being above ground,” and that’s likely enough to remove it as an effective medium of exchange.

In the meantime, what can be done about the market’s dramatic reaction to the Amazon rumors, a 15% increase in BTC in three hours last Monday? It is probably another example of the extreme volatility of cryptocurrencies and not a good advertisement for a possible medium of exchange. “The crypto market loves to be strong on potential headlines as we saw in the spring,” said Rathi, adding:

“The difference this time around was that the headline came from a relatively reputable publication, which gave it more weight. I also think crypto investors have been craving positive news while prices have been falling for months.”

Overall, “this type of introduction reminds me of 2013 when a big focus for Bitcoin was using it for payments,” said Monahan, “but the narrative drifted away from it over time and more towards Bitcoin as a store of value.” If we get back to the idea of ​​using Bitcoin for payments, rather than just as an investment, it could make Bitcoin a lot more valuable.

“However, the fact that more and more companies are accepting it will become more important, especially with the added context of El Salvador and the regulatory debate,” added Monahan. “It can change things for Bitcoin in the years to come.”

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