Once again, the cryptocurrency crowd has something to brag about: speculation that Amazon (AMZN) is ready to accept digital cash.
The tech giant has announced a vacancy for a Digital Currency and Blockchain Product Leader in the Payment Acceptance and Experience team. The successful candidate will “innovate on behalf of clients in the payments and financial systems of one of the largest e-commerce companies in the world”.
The price of Bitcoin (BTC-USD) and other cryptocurrencies rose on the back of the publication. Some reports have indicated that Amazon may accept bitcoin in just a few months.
Read more: Bitcoin and Other Cryptocurrencies Rise Due to Amazon Payments Rumors
Bitcoin investors should not turn away just yet. We’ve been here before.
Tesla (TLSA) suggested it would accept bitcoin as a payment for its electric cars earlier this year before its boss Elon Musk backtracked. The saga rose and then bitcoin prices fell. Any gambler who bought bitcoin after the initial Tesla data is now facing some sharp losses in the double-digit percentage.
Amazon may end up accepting bitcoin but there are plenty of reasons why it would choose a different path. Bitcoin presents a regulatory problem. Amazon’s Know Your Customer rules require checking who owns each token, and anti-money laundering rules mean that every bitcoin must be verified as not illegal. Pricing your products in a currency that often jumps dramatically from hour to hour is also a challenge.
Read more: Bank of England official: We may reach our financial ‘iPhone moment’
Bulls will argue that Bitcoin volatility is declining and point to companies emerging to solve regulatory issues like this.
However, Amazon may simply decide to squeeze the underlying technology and build its own, less disruptive version of Bitcoin. This is what Facebook (FB) decided to do with Diem, formerly Libra.
The European Union and the United Kingdom are already talking about building their own cryptocurrencies – so why not roll out a “bezos back” too? The benefits to Amazon will be obvious: keep cash in your ecosystem to encourage people to spend more and more on the site. With interest rates starting to rise, a huge pile of client money held in interest stripping accounts wouldn’t be too bad either.
In a statement, Amazon said it was “inspired by the innovation taking place in the cryptocurrency space and is exploring what this might look like on Amazon.” This certainly leaves the door open for a number of possibilities.
Read more: Can Ethereum Overtake Bitcoin?
If Amazon launches its own digital currency, it may not be a positive for the price of bitcoin. Certainly, it will validate the technology and concept. But it will also offer competition. Amazon fans can decide to put their fortune in Bezos Bucks instead of Bitcoin.
As always with bitcoin, the principle of “buyer beware” is important. Investors should be wary of potential downsides as well as potential gains. For now, most of the market seems to be focusing only on what’s next.
Watch: What are the risks of investing in cryptocurrency?