Apple 'stamp of approval' for Bitcoin points away from Apple currency

After Apple changed the rules on virtual currencies, the first Bitcoin apps are returning to the App Store.

Bitcoins
Bitcoin

Bitcoin has been given a big boost of Apple appeal as virtual currency apps return to the App Store. Industry observers describe the move as a "stamp of approval" for Bitcoin that plays down speculation Apple could be planning to mint its own Bitcoin-style payment method.

This weekend, Coin Pocket was the first virtual currency-focussed app to return to the US App Store. Features of the app include sending and receiving Bitcoins or transfer funds from other Bitcoin wallets.

Bitcoin is the best known virtual digital currency, or "cryptocurrency", a form of money that isn't tied to any nation, bank or central authority. You can buy or sell bitcoins and store them in a digital wallet, then use them to pay for stuff or exchange directly with other people online.

Virtual currency has proved controversial for its use as an off-the-grid method of payment for drugs and other illegal activities in so-called Deep Web outlets like the Silk Road marketplace. But it's also becoming increasingly accepted in the mainstream, with shops and bars accepting payment in Bitcoin, ATMs appearing around the world, and even local authorities creating their own virtual currencies. Just last week, travel booking site Expedia gave a thumbs-up to Bitcoin.

Apple's attitude to Bitcoin has so far been cautious. Late last year, virtual currency apps including Blockchain, Coinbase and Gliph were removed or rejected from the App Store. Rather than taking a stance against online currencies, Apple was covering itself against possible legal issues. Some governments have issued guidance on virtual currencies, but the legality of such currency remains a grey area in some respects. In Japan, for example, the government earlier this year banned banks from dealing in Bitcoin.

But Apple changed its guidelines for app developers at the start of this month to facilitate transmission of virtual currency within apps. The new rules allow for virtual currency apps as long as they comply with the laws of the areas where they operate, whether those laws are at the national, state, or local level.

Apple's approval of Bitcoin apps lends yet more credence to the currency, according to Garrick Hileman, economic historian at the London School of Economics and the founder of MacroDigest. "Apple's volte-face on Bitcoin is significant for a number of reasons," he says. "It's symbolic of mainstream companies recognising that Bitcoin is not just your typical flash-in-the pan alternative currency, but something more important that's here to stay."

Apple's decision also makes Bitcoins more accessible to the average person. "Holding and transacting Bitcoins is still too complex and risky for the vast majority of people who trust and rely on companies like Apple to curate a safe selection of applications in its App Store," says Hileman. "Apple's "stamp of approval" should have a material positive impact on Bitcoin's adoption rate."

That said, Hileman points to the advice of Bitcoin core developer Gavin Andresen that you should only invest what you can afford to lose.

Cupertino currency

Hileman believes Apple's green-lighting of Bitcoin dampens speculation around the Cupertino-based company making its own version of Bitcoin: "Currencies thrive when they are widely accepted, not when they are forced to live inside a walled garden. It's unlikely that we'd see wide acceptance of competing alternative currencies launched by Apple, Amazon, PayPal, Apple, Google, and other companies which are looking closely at alternative currencies right now. Embracing an external alternative currency like Bitcoin, which has the first-mover advantage in this space, is a move I expect other leading tech and consumer firms to ultimately emulate."

But before Bitcoin fans get too excited, virtual currency journalist David Gilson points out that, "Apple's new guidelines refer to transmission of so-called "approved virtual currencies." There are no assurances that Bitcoin wallets won't be pulled again if Apple decide it isn't an approved currency -- especially if Apple comes up with its own payment system that would compete with Bitcoin."

In the meantime, Apple doesn't want to exclude Bitcoin devotees. "Apple restoring Bitcoin apps will certainly stop that niche group of users migrating to Android just so they can have mobile wallets," suggests Gilson.

 

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