Online retail giant debuts its own virtual currency

Amazon, world's leading online retailer, has unveiled a new form of virtual currency which could radically change the nature of online transactions as well as have strong implications for the global monetary system.

The name of the new virtual currency, Amazon Coins, was made public on Tuesday, as were plans to make the online money available in May at an exchange rate of one penny per unit.

The virtual currency is currently intended for use by owners of the Amazon Kindle Fire tablet computer to purchase apps, games and items from the Amazon Apps Store.

There is no reason, however, that the online giant won't eventually allow customers make purchases of e-books, movies and music using the online money, or even tangible, real-world goods.

While virtual money has long been available as part of online role playing games, this marks the first occasion that a retailer of Amazon's scale has put into play its own system of internet money.

Edward Castronova, an associate professor from Indiana University who specializes in online gaming, told MIT Technology Review that the online currency is likely to expand into the real world.

“If they’re going to do this in this narrow area, they have the technology and the functionality to do it for everything," said Castronova.