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Apple exec confirms cryptocurrency is on company radar
- 07 September, 2019 02:09
After announcing support for digital signatures and public and private encryption keys, which could be used to represent cryptocurrencies, an Apple executive on Thursday made it clear the company is watching blockchain-based digital currencies.
This past spring, Apple announced CryptoKit for iOS 13, which will allow developers to easily create hashes for digital signatures and public and private keys that can be stored and managed by Apple's Secure Enclave. Those keys, which can represent cryptocurrencies, can then be exchanged by iPhone owners as a form of payment through an app.
At the time of its release, Apple did not return a request for comment on CryptoKit and whether it is part of a plan to introduce a cryptocurrency wallet.
On Thursday, however, Jennifer Bailey, vice president of Apple Pay, told CNN: "We're watching cryptocurrency. We think it's interesting. We think it has interesting long-term potential."
Bailey's comments came during a private event in San Francisco.
If Apple is going down the cryptocurrency path, it would be following HTC and Samsung, who've announced plans to create native cold storage wallets on their smartphones. HTC last year announced that its Exodus 1 smartphone would be able to natively store bitcoin or Ether cryptocurrencies; Samsung is making a big push for the same feature on its flagship Galaxy 10 phone, expected to arrive in February.
Jack Gold, principal analyst with J. Gold Associates, said he doesn't expect Apple to roll out cryptocurrency technology "right now." Instead, he expects the company to make sure Apple Pay is working properly and gains marketshare before jumping on a new payment method with "lots of risk" – including potential pitfalls from regulators in the U.S. and Europe.
"I’d guess that Apple will react to what others are doing in cryptocurrency..., but only after time to evaluate how successful [they are] and what problems arose," Gold said. "Apple is very good at fixing any perceived problems in technologies and presenting them to end users, but generally does not lead the marketplace, only getting on board after a market is established."
A study from Juniper Research found that the number of people using digital wallets for all types of currencies is expected to increase from 2.3 billion this year to nearly four billion – or 50 per cent of the world's population – by 2024. This, in turn, will push wallet transaction values up by more than 80 per cent to more than $9 trillion a year.
The study indicated the increases would be driven by a greater volume of transactions conducted via stored credentials, like those of a crypto wallet.
Cryptocurrency as a form of payment for services or products has attracted some of the largest names in financial services and social media. For example, earlier this year, JP Morgan Chase announced plans to launch what is considered to be the first cryptocurrency backed by a major bank, a move that could legitimise blockchain as a vehicle for fiat cryptocurrencies.
JPM Coin, as the bank is calling its new cryptocoin, is considered fiat currency because it's backed by U.S. dollars in accounts designated at JPMorgan Chase N.A.
In June, after months of speculation, Facebook announced plans to launch its own cryptocurrency and digital wallet, something experts said should be a clarion call to commercial banks: if you don't begin to explore blockchain technology, tech companies could eat your lunch.
Clifford Rossi, a finance professor at the University of Maryland's Robert H. Smith School of Business, said Facebook's entry into the banking marketplace puts added pressure on commercial banks at a time when they are already scrambling to learn how to compete against nimbler, tech-savvy fintech companies.
Apple launched its mobile payments platform, Apple Pay, in 2014; it processes about one billion transactions a month, according to some reports. And with its entry into the credit card industry this year with its new Apple Card, the company has firmly planted a flag in the fintech market.
Gartner Research Vice President Annette Zimmermann said offering a cryptocurrency is just another way for Apple "to keep people in their ecosystem and to differentiate via keeping your data private.
"Just like with the Apple Card, that has generally the main function of keeping people in the Apple ecosystem. You have to own an iPhone in order to use an Apple Card. And the company has followed the path of trying to differentiate with safeguarding their users privacy in several areas," Zimmermann said.