Amazon debuts Coins for Kindle Fire, says it’s only ‘Day One’ for its virtual currency

amazoncoinAmazon this morning rolled out its new Amazon Coins virtual currency for users of its Kindle Fire tablets — letting them use the coins to buy apps, games and in-app items such as song collections, recipes and extra game content.

But the big question is where Amazon will take the currency from here. In a news release, one of the company’s executives signals much bigger ambitions.

“We will continue to add more ways to earn and spend Coins on a wider range of content and activities—today is Day One for Coins,” said Mike George, vice president for Amazon apps and games, echoing one of Amazon CEO Jeff Bezos’ favorite lines.

Could Amazon ultimately accept virtual currency across its traditional online retail store? MIT Technology Review dug into that topic in February. “The narrowness in scope is purely a decision,” Edward Castronova, an associate professor at Indiana University, told the site. “If they’re going to do this in this narrow area, they have the technology and the functionality to do it for everything.”

Purchases of virtual items using virtual currency aren’t taxed, but if Amazon pushes further into this area, it could attract regulatory scrutiny and a push for taxation, the site reported.

Amazon first announced the plan for Amazon Coins in February, leading up to the rollout today. Every Amazon Coin is worth one U.S. cent. The company says it deposited 500 free coins ($5) in the account of every Kindle Fire user today.

Todd Bishop 05/23/20135:24 pm

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Todd Bishop 05/23/20132:50 pm

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  • doh

    Check ur facts on taxes. Ur wrong.

    • http://geekwire.com Todd Bishop

      Here’s how the MIT Tech Review explained it: “Businesses, such as online games, that sell virtual currencies pay taxes on the real-world dollars used to buy their currencies, Castronova says, but they don’t pay taxes on anything the currency is used to buy within their world, like virtual armor, since it’s not considered a real-money transaction.”

  • roby8

    Look out, Federal Reserve! :-)

    We really do need an alternative currency and money system in this country. We could then all laugh and let the Big Banks collapse, while we continue to use the other, now more valuable currency.

    The economy would end up working better, with less inequality, and less corporate control of the government!

    • n8

      Paying real dollars for virtual currency…there’s a sucker born every minute. Virtual currency is like baseball cards, only worth what the next sucker is willing to pay. Without government backing but being subject to governments’ whims, virtual currencies will remain risky. And isn’t the dollar basically already a virtual currency? How much cash does anyone really carry on them anymore?

      • http://www.facebook.com/flavio.kaplan Flavio Kaplan

        Until the 70s, currencies were backed by gold deposits, but this is no more. The US Dollar for example has zero backing as do most currencies anywhere. The only backing is the consensus among currency users that those promises are good (currency is an IOU from the government to you). If people ever lose confidence, there is nothing to stop the landslide other than a new consensus or a replacement currency.