Cryptocurrency

Mistake To Write Off Apple After Credit Card Crypto Ban

apple steve jobs

Apple will not allow users of its soon-to-be-released credit card to buy cryptocurrencies or “cash advances or cash equivalents”, according to reports.

That fits with what we know about Apple, but that hasn’t stopped headlines about the company snubbing crypto.

The truth is altogether less dramatic. Apple is not letting customers do high-risk stuff that could cost them. Buying cash on a credit card is never a good idea and buying cryptocurrencies that way pure madness.

Apple’s credit card venture is in partnership with investment bank Goldman Sachs.

According to reports, the credit card could launch as soon as this month.

It is the sort of prudence on behalf of its customers – or paternalism some might say – that is built into Apple’s DNA.

Clearly in the light of Facebook’s Libra announcement an expectation had been built up in some quarters to the effect that Apple, along with its big tech peers, is starting to think about crypto applications in some part of its operations or product line, if not in the payments realm for now.

Apple CryptoKit hype

But hopes of an Apple pivot to crypto were always thin, resting as they did on the recent release of the Apple CryptoKit framework beta for iOS devs and the arguably wildly crypto-friendly spin put on that.

Far from being a bold step towards the cannon fire of the crypto dawn, it turns out that Apple CryptoKit is mostly a pulling together of existing code. It can be used “to perform common cryptographic operations” including being able to “use public-key cryptography to create and evaluate, and to perform key exchange.”

There is now access to the onboard secure enclave of the iPhone, which holds out the prospect of creating onboard hardware crypto wallets. The Apple framework documentation states: “In addition to working with keys stored in memory, you can also use private keys stored in and managed by the Secure Enclave.”

However, that in itself was not enough to justify the “Apple going big on crypto” story.

Admittedly, Apple has been slow to make the most of Apple Pay, moving tentatively perhaps given its lack of expertise in the payments industry.

For instance, Apple Pay Cash, where you can send money from your linked Apple Pay card to other iOS users by sending a message, is still US-only.

Apple’s approach to product development has always taken the time to watch and learn – and then to introduce a best-of-breed device or executing a category defining intervention, the latter coming to define Apple in the past decade.

Missing Steve Jobs… and now Jony Ives

The tension between not taking chances with tech (sticking to proven and reliable solutions) and looking for ways to do things differently, with an ease-of-use mantra fused to quality industrial design, build and service, was navigated by Steve Jobs.

Jobs’s ability to exploit the potentialities of specific tech innovations through a prism that weighed the pros and cons apparent in a given concrete interaction (product) of the liberal arts and technology. Making it easier to get stuff done in the creative world was Apple’s core pitch back in the day.

If you really want to know where Apple is headed with crypto, there’s probably a lot more to be gleaned from divining the motives of erstwhile design chief Jony Ives. He left Apple last month to set up his own design studio and as Apple followers have noted, he has been pulling back from being hands-on at Apple.

Turns out he wasn’t in work very much at all and was growing disenchanted with what he saw as the bean-counters taking over.

The product was no longer the center of everything.

Unlike in the days of Steve Jobs, under today’s regime design concessions are all too apparent, such as the infamous iPhone notch and the camera bump – the latter set to worsen considerably with iPhone 11 by all accounts.

To cut to the chase – logistics and supply man Tim Cook is no Steve Jobs and the departure of Ives suggests the days of risk-taking by Apple may be receding.

If there is greater risk averseness and/or an unwillingness to take risks in the right areas, that could set back the prospect of Apple one day launching its own crypto or at least allowing blockchain development in its Cloud product.

But that’s not the end of the story.

Competitors to push Apple into crypto?

Competition with Samsung and others could still yet drive Apple in the direction of crypto as part of its service offering.

Crypto may have been the sort of disruptive tech that Jobs would have followed with some interest. Jobs died of Pancreatic cancer in October 2011.

If he was still with us would Steve Jobs be thinking differently about crypto; imagining networks of value unanticipated by others and waiting for Apple to fully visualize and realize?

Famously Apple co-founder Steve Wozniak made a $2,800% profit on his bitcoin holding.

Apple, true to form, is never first into a category or market so again no surprises in its holding back on crypto. But is the fact that first-mover advantage among US big tech going to Facebook and its Libra project a sure sign that the leadership of the tech sector lies with software not hardware?

Microsoft, Google and Amazon all have made forays into crypto at one level or other, albeit in areas often at the margins of their businesses, although it should be noted, significantly, that the three companies named have a blockchain offering on their cloud platforms.

If you’re looking for the fast-follower that will be next to make a crypto move Microsoft could be the more fruitful to watch at this time.

Ethereum’s Vitalik Buterin spoke at Microsoft’s recent developer gathering and the decentralized application platform is now available on Azure.

But don’t bet against Apple. Jobs was meant to have left behind his thoughts on how to pick the developer winners.

Blockchain in iCloud and stablecoin support in Apple Pay

CryptoKit in an incremental step that could be very much in step with the company’s usual approach to product development.

In this view, there’s no reason to write-off Apple taking more assertive crypto steps – just don’t expect an Apple crypto wallet anytime soon.

The regulatory climate is not conducive, to put it mildly: it is still in a state of flux – although that will be changing sooner rather than later as global rules and guidelines for cryptoasset likely roll out over the next few months.

And of course Libra has set in train an acceleration of regulatory oversight plans, which could help the likes of Apple in their decision-making.

The further tiny steps we can expect from Apple might include allowing devs to run a blockchain instance in iCloud and perhaps, post Libra (whether it flies or dies) next year or later, stablecoin support in Apple Pay.

Bitcoin (BTC) recovery could nudge Apple too

Bitcoin is currently trading up 8% at $11,688 as it attracts investors looking for safe havens in the trade war-induced stock market dips prompted by a devalued yuan.

The continued recovery of the bitcoin price is raising the profile of crypto and there will be someone at Apple with the task of monitoring such things. It may lead them to suggest a quickening tempo for any already-existing crypto projects ongoing at the tech giant.

About author

Gary is a cryptocurrency analyst at interactive investor, the UK’s second-largest stockbroker. He has been writing professionally about cryptocurrency since 2013, when he initiated bitcoin coverage at Money Observer, one of the UK’s most respected investment magazines. Gary writes for EWN in a personal capacity and his contributions should not be taken as investment advice.
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