Beyond the rumors: Amazon’s likely direction in crypto – American Banker

Despite the distraction of its spacebound CEO, it was a single, unfilled job listing on Amazon’s website that moved markets this week.

The e-commerce giant is recruiting a digital currency and blockchain product lead, a position that hints at a future where shoppers can spend cryptocurrency directly on Amazon. But there are many other ways Amazon can use this technology β€” without dealing with the risk, volatility and expense of accepting crypto payments.

“The underlying technology of cryptocurrency and distributed finance offer major financial benefits for a company like Amazon. Payment processing can be done for considerably less using crypto-based merchant systems,” said Arran Stewart, co-founder and chief vision officer of the blockchain-powered recruitment platform

Amazon’s job posting calls for a person with expertise in blockchain, distributed ledger, central bank digital currencies and cryptocurrencies to “develop the case for the capabilities which should be developed, drive overall vision and product strategy.”

Blockchain and other types of distributed ledgers provide the network to create and distribute cryptocurrency, stablecoins and the government-issued digital currencies that are under development in most countries. When not used for crypto trading, distributed ledgers are also toolboxes for open banking, cross-border peer-to-peer payments, digital ID, risk management and myriad other business functions.


Amazon posted a job listing for a digital currency and blockchain lead, leading to speculation that it wants to accept crypto for payments.


There have been rumors that Amazon will create its own currency to keep sellers and other users inside its network, though the Federal Reserve Bank of Richmond has issued a report contending that even large technology companies like Amazon and Facebook don’t have the scale to profitability offer their own currency.

As the Amazon job posting spread around technology blogs, speculation that Amazon would accept cryptocurrency payments contributed to a 14% jump in bitcoin’s value earlier this week. Amazon did not return a request for comment by deadline, though the e-commerce firm has denied that it’s planning to mint its own money or accept cryptocurrency for payments, but also added it was exploring uses for cryptocurrency.

If not payments, then what?

Large technology companies generally do not accept cryptocurrency. Consumers can still spend crypto from a debit card, but the funds are converted to traditional currencies before they reach the merchant β€” which may not even be aware that crypto was involved in the sale.

In this manner, PayPal and Venmo both allow consumers to buy, hold and sell cryptocurrency. Venmo, which is expanding beyond its core P2P transfer business into check deposits and contactless cards, can use its crypto support as a way for users to funnel investment funds to retail purchases.

Bitcoin has also become a large part of Square’s strategy, as the payment company’s investments and products that allow users to invest in bitcoin contribute to 70% of Square’s revenue, though Square does not support cryptocurrency payments in its merchant network.

While cryptocurrency is volatile, the overall global value of cryptocurrency investments has been as high as $2 trillion at times in 2021. Turning this pot of virtual gold into retail spending has sparked a new wave of competition for technology companies.

By focusing on currency conversions, large technology companies can tap into the crypto craze to support other business goals that are potentially more valuable than direct payments.

“As an asset that undoubtedly has value, crypto could be a great way of enticing further customer spending, as well as attracting new customers to Amazon for their purchases,” Stewart said.

Amazon, for example, could use its single-sign-on capabilities and existing payment technology designed for third parties to indirectly benefit from crypto acceptance. Third parties would accept cryptocurrency, with Amazon providing the underlying support for authentication and user experience for both merchants and consumers.

“There are many crypto companies that would be happy to take the crypto risk for an Amazon crypto acceptance button,” said Tim Sloane, vice president of payments innovation for Mercator Advisory Group.

One way Amazon could do this is through a blended rate offering to sellers, such as supporting card, bank account or crypto transactions for a lower merchant cost, Sloane said.

By partnering with crypto companies, Amazon could offer PayPal-style function for buying and selling crypto as well as P2P and cross-border remittance transactions.

“Deciding which of these Amazon might implement would fall under its larger financial services strategy, which has been focused on developing tools that drive greater consumer adoption and spending, or attracting more sellers so Amazon can sell more, or reducing friction between buyers and sellers,” Sloane said.

Amazon has recruited for other blockchain positions, including blockchain development, digital identity and distributed finance. Distributed finance often refers to transactions that involve smart contracts or blockchain, and can include the use of digital currencies such as crypto or stablecoins.

Blockchain, crypto and stablecoins can carry extra valued-added payloads not available on the restricted, batch-based payment rails that still mirror the ISO standards established half a century ago, said Richard Crone, a payments consultant. Another big opportunity is leveraging the blockchain to carry additional information, adjudicating stock-keeping-unit billing and reconciliation before an invoice is paid in business-to-business applications

“In business-to-consumer payments, that same SKU-level integration by cryptocurrencies can act as a platform for activating and redeeming offers with net settlement, without friendly fraud, for promotional offers,” Crone said.

Competing for talent

Amazon has lots of competition in blockchain and crypto technology.

Visa and Mastercard are positioning themselves as partners for governments that are developing central bank digital currencies as well as signaling support for stablecoin payments. Visa has partnered with dozens of cryptocurrency wallets to enable conversions from crypto to traditional currencies at the point of sale, while Mastercard has invited crypto startups access to the card brand’s accelerator program.

One of Visa’s partners, Coinbase, went public this year as part of an effort to expand deeper into payments and financial services. Another Visa partner, Circle, has quickly expanded its USDC stablecoin, and is planning its own public listing for later this year.

Circle’s stablecoin came to market ahead of the Facebook-affiliated Diem, which is expected to launch later this year. Diem has changed several times to address regulatory concerns, positioning itself as an enabler of digital payments for e-commerce through partnerships with Shopify and the Isreali API company First. Diem has partnered with Silvergate, a U.S. bank that specializes in blockchain, for issuance.

These moves create more competition among Amazon and other large technology companies, and will bring more investment capital into the blockchain market.

“These large companies provide a stamp of approval for blockchain innovation, which makes funding a business much easier,” said Steven Pierson, a managing partner at Lovell Minnick, a New York- and Los Angeles-based fintech investor. “Most of the investors in the tech space will have blockchain or crypto startup investment in their funds.”

Companies will compete for blockchain expertise, making it beneficial for Amazon to hire experts as soon as possible.

“While blockchain and cryptocurrency do not currently affect all tech companies, there is a high chance they will in the future,” Stewart said. “Also, it’s not uncommon for tech companies to invest in technology for research and development as a form of insurance for the future innovation of the company.

The demand for blockchain expertise has jumped 500% over the past year, while the number of available jobs in the U.S. has increased 33 times in the U.S. alone, according to Stewart.

“This means that the war for this talent among tech companies is very real and presents another major challenge for companies that are looking to continue innovating by offering their customers the greatest level of service,” Stewart said. “As expected given all of this, there is a considerable shortage of blockchain expert labor in the market and demand is looking like it will outstrip supply for years to come.”