I welcome this huge milestone, where I hope a swarm of competitors enter the arena. Through heavy competition a new, trusted value system may emerge, one that could compete with traditional government fiat currencies.
The current incarnation is not remotely in the same league as a government fiat currency. I am sure its goal is to play some shell games to drive sales and usage of Amazon services.
In January 2011, in post Ideal form of Money - Power to the People , I describe my ideal of what Money should be. I quote:
I think what is required is to allow any company to create a system, using open review and process, to be a viable storage of wealth.
Amazon, thank you for putting your toe in the water. If we do see tech starting to create their own version of bitcoins (the current premier outside currency experiment), this will be the weapon that will bring down gold, silver, and precious metals as an option for currency. By the way, bitcoins seems to be getting traction, and it's virtual currency is up about 50% since January 1st alone. However, this is likely heaver speculation and hoarders appearing.
What we will see is a movement from Precious metals ( 1930's and earlier), to leveraged precious metals (mixed fiat and precious metal ratios), to pure government fiat currencies (Nixon), to community based-trust currencies. (social/technology driven)
If this can happen the transition will be very painful, but on the other side I believe rampant economic growth to take hold, globally, as a trusted, controlled, transparent, competitive currency system gives business the confidence to move ahead.
I am getting waaay ahead of my self here, any electronic money system to gain traction is likely to occur after the global currency crisis that looms ahead.. (2017?).
I am putting this in my Financial Ground Zero series. This is not contributing the the future crisis ahead, but will offer a solution to the crisis.