09 October 2015


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Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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25 January 2011  |  6247 views  |  4

The idea of a virtual marketplace is no longer new--companies like Second Life have already proven the viability of creating money out of nothing. Last year, Second Life's user-to-user transactions topped $567 million in real U.S. currency and their users, known as residents, cashed out $55 million in real Second Life earnings.  That's a whole lot of moolah. So should anyone be surprised that Facebook wants to get on the money train by creating their own virtual currency?  And if Facebook succeeds, who will be next?

My best guess - Apple - and not just because of my ongoing love affair with the Mac.  But rather, because of the interconnected and multi-pronged world that is Apple. With iTunes, iPod, iBook and of course the iPad.  Apple has a deeply entrenched and loyal community of millions  (maybe billions) from which to build a virtual currency that could potentially be used by more people than currently live in several mid-sized nations.  A community that is already well established and primed to adopt not only the latest technology but also the latest consumer behaviors. Moreover, it is a group that spans both the individual consumer market as well as the high-dollar corporate one - a fact that could rapidly translate into really big money not only for Apple but also for the application developers and financial institutions that would be needed for it to achieve success with a virtual currency.

So if Facebook succeeds and then some organization like Apple also decides to get on board the virtual money train - the possibilities may be endless. One day soon, we may all wake up and find that instead of the EURO, Dollar and Yen, our paychecks are coming in the form of the Apple, the Facebook or the Kia currency. Who knows maybe one day, I'll be able to use "Tracy" dollars for my next MAC upgrade. I only need a couple of million followers to make it happen; right?


Comments: (4)

Keith Richbell - eftpos Payments Australia Ltd. (ePAL) - Sydney | 27 January, 2011, 02:11

Well said Tracy - you are spot on with your assessment. I would add Google to your short list of companies who might reinvent money. Could this be the beginning of the end for the card schemes?

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Tony Waszkiewicz - swallow tech - London | 27 January, 2011, 09:30

Tracy, you don't need a couple of million followers. In 2007 Totnes, a small market town in Devon with a population of 7,500, was the first town in the UK to introduce its own local alternative currency, the Totnes pound. The initiative is part of the Transition Towns concept a rapidly growing global movement that urges local communities to "respond to the challenges, and opportunities, of peak oil and climate change". Now there are several other towns with their own currency. I have a Brixton pound on my desk right now, it's worth more than my Zimbabwe trillion dollar notes:-)


After all fiat money is backed by nothing more than acceptance of value.


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Matt White - Finextra - Toronto | 27 January, 2011, 10:40

We covered the Brixton currency here.

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Ainsley Ward - Clear2Pay - Diegem | 01 February, 2011, 05:48

One of the first issues that companies such as Apple will need to overcome is the physical separation of markets within their own organisations. For example you can't currently send a gift in iTunes from a Belgian account to a French one - depsite the same currency. So even if they launch a single currency for iTunes (Apple pips?) it is still a national solution.

Virtual currencies have their merits and certainly work in single use or closed loop situations. However, the lack of control from a Government point of view (mostly taxation) means that as soon as they get to a certain size, the regulatory authorities will begin to find ways to limit them - examples Tencent QQ coins, PayPal in India.

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