By David Drake
Seattle-based corporates, Starbucks and Amazon, could become the first Fortune 500 companies to develop their own cryptocurrencies. Based on last week’s media reports, the two companies are likely to implement their blockchain and cryptocurrency strategies this year.
Starbucks is keen on powering its integrated app with blockchain technology. During a Fox Business interview, Starbucks Executive Chairman, Howard Schultz, indicated his company will likely use blockchain to support its integrated application.
“I believe that we are heading into a new age, in which blockchain technology is going to provide a significant level of a digital currency that is going to have a consumer application,” Schultz said.
According to Shopin CEO, Eran Eyal, the benefits of developing its own cryptocurrency will be huge for Starbucks.
“Having a smooth-running cryptocurrency that has a standard value, no matter where one is in the world, is a good lead for Starbucks’ point-based system as well as enfranchisement of users and the company,” Eyal says.
On its part, Amazon received a positive response on the use of a digital currency to transact on its system. A survey that polled 1000 of its customers last month showed 51.7% are open to transact using its digital currency,‘Amazon Coin‘.
Further, 26.4% of polled customers were not sure about utilizing ‘Amazon Coin’ while 21.9% said they are not willing to use it. Among the company’s prime users, 58.2% indicated their willingness to use its digital currency.
The e-commerce giant first introduced ‘Amazon Coin’ in 2013 to its Kindle Fire community and limited its use to purchasing games and apps on the Amazon app store.
A report developed by Gartner shows the value that blockchain will add to businesses globally will exceed $176 billion by 2025, and will top $3.1 trillion by 2030.
This is a deal that no company would want to miss. Should Amazon and Starbucks turn their plans into a reality, their entry into the cryptocurrency space will signify the growth of blockchain as the go-to technology for powering corporate operations.
Nick Martyniuk, CEO and co-founder of WePower, says, “The technology is developing rapidly and becoming increasingly applicable to corporate operations and environments. I think we will increasingly see more established, well-known companies implement blockchain as well as token-based incentive systems in their technology stack.”
The adoption of blockchain by Amazon and Starbucks will simply catalyze its growth further by expanding its application and enhancing its uptake by other corporates.
“Big adoptions will help the whole technology to mature but on the other hand, it will lead to the user-friendliness and broad usage, initiated by big players and followed by others. The result will include a growth of crypto market and higher consumer trust. Major adoptions have always had a multiplier effect businesses, that’s the same thing here. Wider usage will certainly have a positive impact on the sector and the technology,” notes Bojan Oremuz, the founder of EMMARES.
Though initially blockchain was used to support Bitcoin, its application has expanded to power other networks that are not related to this cryptocurrency. Several aspects cause this technology to appeal to corporate companies like Starbucks and Amazon.
Top on the list is its ability to facilitate secure, fast and low cost transactions via its distributed network of ledgers. Blockchain also allows for the verification of transactions real-time, without the involvement of intermediaries like clearing houses and banks.
Beyond facilitating payments, corporates will find blockchain technology useful in supporting other management processes.
“Ideally the ‘low-hanging-fruit‘ solution is going to be supply chain management or overhauling the ordering processes,” Eyal says.
According to Chairman of SID Limited, Jose Merino, the Amazon-Starbucks adoption of blockchain and cryptocurrency would be a big validation for the industry.
“If this truly were to happen, it would be the biggest industry endorsement thus far, to the already widespread use of cryptocurrency and blockchain technology. The biggest winners will be those companies themselves as crypto owners are desperate for more places where they can spend their cryptocurrency, thus benefiting Amazon and Starbucks directly, if they truly adopt it,” Merino says.
The growing application of blockchain continues to create space for this emerging technology as a means of asserting itself across sectors. Today, blockchain is being applied in almost every sector, from fintech and finance all the way to healthcare applications. With time, all companies will realize how blockchain can help improve revenue without having to adjust their models of business.
Early adopters of blockchain technology will continue to increase momentum as more businesses embrace blockchain to secure their financial operations, particularly in cryptocurrency transactions.
The Friday trading session ended with Starbucks and Amazon stocks showing green. This is an indication that the market is satisfied with the news about their cryptocurrency and blockchain integration.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.