Twitter and Amazon announce crypto plans

The news: Twitter CEO Jack Dorsey confirmed in the company’s Q2 earnings call that the social media platform will integrate Bitcoin into its services, and Amazon wants to let customers pay in cryptocurrency—taking approaches the companies hope will let them avoid the same pitfalls that have bedeviled Facebook’s project.

Here’s what they’re planning to do: Twitter is focused on Bitcoin, while Amazon is open to other cryptos.

• Twitter. The planned integrations would enable Bitcoin payments for existing products like Tip Jar, which lets users receive tips from their followers, per TechCrunch. Dorsey is big on Bitcoin: He recently announced that his digital payments firm Square will develop decentralized finance services on the Bitcoin blockchain, and he invested in a Bitcoin development fund in February.
• Amazon. The ecommerce leviathan posted an opening on its payments team last week to develop its Digital Currency and Blockchain strategy, per Business Insider. The role asks for expertise in cryptocurrencies and central bank digital currencies (CBDCs), suggesting Amazon wants to add payment options for a wider range of digital currencies than just Bitcoin. So far, Amazon’s main involvement in the space is its Managed Blockchain service, which helps client firms interact with public blockchains like Bitcoin and Ethereum or scale their own private networks.

How do these compare with Facebook’s crypto plans? Twitter and Amazon are undertaking less ambitious crypto plans than Facebook, which should help them avoid the same difficulties.

Facebook originally proposed its own digital currency in June 2019, a blockchain-based payment system for users to make purchases on its platform. But the project has been marred by delays and regulatory hurdles regarding data privacy, money laundering, and financial stability concerns. Despite reports the crypto would roll out by Q1, no launch date has been confirmed.

Twitter and Amazon decided to piggyback on existing cryptocurrencies instead. CBDCs in particular should be easier to integrate, as these would have full regulatory support. However, Amazon is reportedly also working on its own digital currency, and the new opening may assess Facebook's woes to formulate the best strategy forward for the project.

The big takeaway: Big Tech clearly thinks cryptos can improve their global user reach thanks to blockchain's fast and cheap payments properties.

Twitter’s and Amazon’s announcements highlight crypto as an efficient additional payment option to power their global platforms. Blockchain can reduce the time for cross-border payments from days to 4–6 seconds on average while also reducing transaction costs, per Insider Intelligence’s Blockchain in Payments report. As Dorsey said regarding Bitcoin: “If the internet has a native currency ... we are able to move so much faster with products such as Super Follows, Commerce, Subscriptions, Tip Jar, and we can reach every single person on the planet because of that instead of going down a market-by-market-by-market approach.”