Apple Allows Virtual Currencies in Apps, Opening Door to Bitcoin
Apple Inc. (AAPL) changed its policy to let software developers include virtual-currency transactions in their applications, paving the way for new forms of money like bitcoin to appear on iPhones and iPads.
While Apple didn’t mention bitcoin specifically, its developer terms now allow for certain “approved virtual currencies,” without saying what those were. Apps that use the digital money must comply with state and federal laws wherever they’re designed to work, the terms say.
The change signals that Apple is warming up to virtual currencies after previously blocking programs like Blockchain.info from its App Store. Bitcoin is the most popular digital currencies, which governments are struggling to determine how to regulate because they exist only as software.
“This is a sign that the ecosystem is maturing and gaining credibility,” Bill Lee, an investor in bitcoin wallet BitGo, said in an e-mail. “To be clear, I still think bitcoin is in its infancy as a technology, but its acceptance is becoming more and more mainstream.”
Bitcoin entrepreneurs were already predicting an explosion of activity.
“Get ready for a plethora of bitcoin iOS apps!” bitcoin venture capitalist Adam Draper said in an e-mail. “Very exciting news!”
Developer Rob Banagale said he’s planning to submit a new version of his app, called Gliph, which was kicked out of Apple’s store last year because it let users send bitcoins to each other in instant messages. Banagale had to strip out that function for iOS devices; the app is only fully functional on phones and tablets that use Google Inc.’s Android operating system.
“If anything, Apple had more to lose by keeping bitcoin off the App Store,” said Gil Luria, an analyst at Wedbush Securities Inc. “Bitcoin users were not going to give up bitcoin - they were giving up on the iPhone.”
After Apple removed Blockchain, several people posted videos online destroying their iPhones. One user shot his iPhone with a sniper rifle, another smashed it with a metal bar and another threw it down a flight of stairs.
After topping $1,000 late last year, Bitcoin’s price plummeted to $360.84 in April. It has since rebounded, reaching about $667 yesterday.
While bitcoin and other virtual currencies still aren’t used by many retailers and service providers, they are gaining acceptance. Last month, satellite TV provider Dish Network Corp. said it will soon begin accepting bitcoin payments from subscribers.
Getting access to iPhones could help increase bitcoin’s use, as Apple is the top U.S. smartphone manufacturer, with a 41 percent average share of the market in the three months ending in March, according to ComScore Inc. Until now, most users have had to use their PCs or Android phones to pay for goods and services with bitcoin at food carts, restaurants and stores.
“It’s critical that Apple allows bitcoin transmission to occur,” Banagale said in an interview. “If we can’t get apps into the App Store, bitcoin will always going to be suppressed in its potential.”
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