A current job advertisement indicates Apple (AAPL) is serious about cryptocurrency. An entry into the cryptocurrency would be an enormous turning point for Apple. In 2013 Apple removed all bitcoin (BTC) Transactional apps that included Coinbase, and the app wasn’t back online until seven months later.
The new role at Apple is now called Business Development Manager – Alternative Payments. The publication explains that creating partnerships and introducing new programs and features for the Apple Wallets, Payments and Commerce team would include the task.
The biggest clue from the publication is that Apple is looking for someone with “more than 5 years of experience in or with alternative payment providers such as digital wallets, BNPL, Fast Payments, cryptocurrency, etc.”
Certainly, Apple seems to be embracing the idea of cryptocurrency – like many others that include Ray Dalio, Carl Icahn, and even some Federal Reserve governors. After all, Apple is already a big player in the digital wallet with its app wallet. When it started in 2012, it could only hold digital boarding passes. However, it has grown rapidly and includes a range of financial services like contactless Apple Pay, peer-to-peer payments, the Goldman Sachs-powered Apple Card, and loyalty rewards programs.
In addition, a partnership between Coinbase and Apple is to be expanded in the near future. According to MacRumors, Coinbase included Apple Pay graphics in a recently released app update.
Apple has been watching cryptocurrency for years
Jennifer Bailey, vice president of Apple Pay, said two years ago that Apple is “watching” cryptocurrency. “We think it has interesting long-term potential,” said Bailey.
And Apple CEO Tim Cook is obsessed with making physical money obsolete. “I think I hope I will still be alive to see the money removed,” he said at a meeting for Apple shareholders. “Because why would you have this stuff? Why take all the cost of printing this stuff and then some people steal it and you have to worry about fakes and all of those things,” he continued.
What will be the impact on cryptocurrency if Apple steps into storage space?
Apple’s involvement in cryptocurrency can have two main effects:
Immediate Credibility: Much like PCs in the homebrew computer scene of the 1970s, Bitcoin started out as a “nerd coin” that nobody understood. Bitcoin has grown rapidly in the past two years and has reached new heights as big companies like Tesla and Square placed big bets on it. And of course, the Coinbase crypto exchange went public in a historical direct listing on the Nasdaq.
The new high point, however, could be when Apple, arguably the most trusted brand in the world, adds its seal of approval by adding Bitcoin to Apple’s payment system. As a result, consumers may feel more comfortable holding Bitcoin and using it for daily transactions.
Network effect: Big tech brings a tremendous power of network effect to every industry they enter. Apple Pay has 43.9 million users and over 70% of retailers offer Apple Pay in their stores. If Apple is offering Bitcoin as an easy payment method, retailers may be more likely to accept Bitcoin in their stores. After all, they don’t have to add any extra functionality to their payment system to accept Bitcoin as it is already built into Apple Pay.
What about other big tech companies entering cryptocurrency?
Of course, Apple isn’t the only one looking at crypto. Google Pay already accepts the Coinbase card. But Facebook may be the company that is most serious about cryptocurrency. Libra was a cryptocurrency proposed by Facebook, but it quickly became a political hot button. As a result, Facebook scratched the name Libra and quietly announced a new cryptocurrency called Diem. Experts believe the launch will take place around this time as crypto coins are much more mainstream.
And Diem will have serious firepower behind it. There are 25 companies involved in the Diem Association, including Uber, Lyft, Shopify, and Coinbase. The venture capital firms Andreessen Horowitz, Breakthrough Initiatives and Thrive Capital also belong to the group.
Experts believe the purpose of Diem is to become a global currency that helps non-banks in developing countries around the world by making money easier to exchange on platforms like WhatsApp. This app has an unmatched network effect as WhatsApp has 2 billion active users worldwide.
Will Big Tech’s Entry Affect Bitcoin’s Value?
Of course, investors are wondering if Bitcoin’s value will fall as more competition gets into the cryptocurrency space. The common misconception is that competition is always harmful to a company, but it is not necessarily the case. For example, Netflix CEO Reed Hastings has repeatedly stated that he welcomes competition in the streaming world as it would accelerate the adoption rate in his category of streaming services. Why? Of course, the category ladder usually rises as the category expands.
In other words, when users sign up to subscribe to streaming services (adoption rate), it is inevitable that they will eventually sign up for Netflix because of their superior offerings. The comparison can be made with Bitcoin. Even if governments (digital yuan, fedcoins, etc.) or Facebook release their own crypto, Bitcoin is likely to be a big beneficiary because of its status.
The views and opinions expressed are those of the author and do not necessarily reflect those of Nasdaq, Inc.