Bitcoin, Apple Pay, and the Emerging Digital Money Ecosystem

July 1, 2015

Today, if you have enough bitcoins you can buy a Tesla, sail the Adriatic thanks to Yacht Base, a Croatian charter company, shop at Whole Foods, fill a prescription at a CVS pharmacy, eat at The Pink Cow diner in Tokyo, share a pint with friends at the Pembury pub in London and The Old Fitzroy in Sydney, or see the Sacramento Kings play basketball.

Using Apple Pay, you can get a room at a Marriott and a quick meal from McDonald’s, Panera Bread, or Subway. Apple Pay is accepted at stores including Best Buy, Bloomingdales, Macy’s, Sephora, Petco, Staples, and Nike. Or use your iPhone at laundromats, parking terminals, and other automated checkout systems, including 40,000 vending machines that sell Coke.

Bitcoin, Square, Google Wallet and Apple Pay are just some of the more prominent examples of another disruptive innovation – the evolution toward digital currency and a new global digital money ecosystem. Money is continuing its centuries old transformation from being embodied in objects with intrinsic value, like gold and silver, to being nothing more than information in the digital wallets of our mobile devices, as well as in our digital accounts someplace in the cloud.

The move to digital money involves a lot more than the transformation of money — cash, checks, credit cards and debit cards — from physical to digital objects that we will carry in our smart mobile devices. It will encompass the entire global money ecosystem, including payment systems, the management of personal identities and financial data, the global financial flows among institutions and between institutions and individuals, the government regulatory regimes, security and privacy issues, and so on. Already, we are seeing the rise of a whole new class of digital currencies and payment infrastructures, with Bitcoin being the most prominent among them.

Just about every aspect of the world’s economy is involved in this transformation. Over time, mobile devices will become our personal windows into an increasingly borderless digital economy. And, because continuing technology advances are now enabling us to bring the benefits of the digital revolution to just about everyone in the planet, digital money is a truly inclusive innovation with no apparent digital divide. Mobile phones and Internet access have gone from a luxury to a necessity that most everyone in the planet will soon be able to afford.

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