By David Drake
Last year marked a milestone in the cryptocurrency industry as Amazon and Starbucks, two of the largest companies worldwide, made steps to incorporate either blockchain technology or digital currencies into their business models.
In a market that’s already highly speculative, and governments are making strides to create their own national currencies for myriad reasons, the move by these two global giants could just be the push that sends curious investors and consumers into the market.
In December 2017, Amazon signed a business deal with R3 that would see the company piggy-backing on their Corda platform. Not long after, in February of 2018, a survey done on its consumers revealed that more than half of the 1000 respondents indicated openness to using the ‘Amazon Coin’.
Starbucks, on the other hand, hopes to integrate blockchain technology on its application, and possibly develop its own currency. For Gilad Woltsovitch, co-founder and Chief Product Architect of Credium, this did not come as a surprise.
He says, “The indication by fortune 500 companies to potentially implement or integrate blockchain technology into their corporate models is very exciting but not at all surprising. It simply shows the technology is receiving validation from corporations that are looking at the space from a purely economic efficiency play.”
This comes at a time when several governments across the globe are publicly buying into the cryptosphere. Some governments, such as Venezuela and the US Marshal Islands, have moved a step further to create their own national currencies. Others are seeking collaboration to bring to effect a super-cryptocurrency that would be used by 40% of the world’s population.
The bold moves taken by Amazon and Starbucks are an indication that the cryptocurrency industry is capturing mainstream attention. While these companies have not laid any definite groundwork for this plan of action, Starbucks is close to accepting cryptocurrency. The coffee giant has always tapped into cutting-edge technology for use with its products and services.
On the other hand, should Amazon utilize cryptocurrency to facilitate a fraction of its sales, its impact would be meaningful because of how it would be perceived by the market in general.
“Interest in cryptocurrencies is spreading to many new markets as the benefits of token economics become clear. The participation of global brands such as Amazon or Starbucks will drive consumer interest in nascent technologies such as Bitnation’s innovative app offering jurisdiction as a service,” notes Dr. John Mathews, Chief Finance Officer at Bitnation.
Amazon is capitalizing on this ripple in the market and is not only interested in using the platform for its goods and services. However, as it taps other markets, such as healthcare, its aim is to compete with the traditional banking system. Approximately 45% of pollsters admit they would use Amazon for primary banking, and close to 50% would use a savings account generated on the platform.
Despite the fact that the ‘Amazon Coin’ will not be transferable, and will only be used to purchase Amazon products, the adoption of cryptocurrencies could easily be a turning point for the market as a whole. It would be a strong indicator to merchants of the viability of this mode of payment, which is one of the greatest challenges faced by this asset class.
“Adopting the blockchain technology by large-scale companies will without a doubt bring better recognition and wider adoption to the cryptocurrency market in the long run. Regardless, whether the blockchain technology is used in payments transactions, sourcing and tracking of the goods or marketing, it will have a positive impact on the entire crypto market,” notes Bojan Oremuz, founder of EMMARES.
Nothing is set in stone as far as these companies are concerned, but with the interests being sparked and groundwork already laid, the only question to ask is which other brands will follow suit.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.