Blockchain Loyalty Programs - Sizzling Or Fizzling?

I’ve been asked many times to share my take on the latest status of Rakuten Coin, an altcoin that I wrote about in How Blockchain Can Crack The Holy Grail Of Loyalty Programs four years ago.

That is not strictly true. I’ve been asked only once, by a certain @droskill on Twitter.

The Rakuten coin was launched in 2018 - but I can find a single mention of it after the intro. Any idea what happened to it? Does it still exist?

(Fans of Joseph Heller might find a striking resemblance between the above paragraphs and the opening paragraphs of Good As Gold, one of my all time favorite novels. I apologize in advance to the Estate of Heller for taking the liberty of paraphrasing what’s one of the most captivating novel starts that I’ve ever read.)

I did some quick-and-dirty research on Rakuten Coin and this is what I found:

• There's no mention of Rakuten Coin anywhere on Google, at least not in any English language websites. I didn't review the Japanese language entries on the SERP.
• I found several mentions of Rakuten Pay, Rakuten Points, Rakuten Cash, and Rakuten Point Card. Cf. Coindesk article entitled E-Commerce Giant Rakuten Now Lets Users Shop With Cryptocurrency and Rakuten.Today blog post entitled Rakuten Points: Much more than just a loyalty program.
• According to the Rakuten.Today blog post: "Since 2017, crypto asset management service Rakuten Wallet has allowed users to buy and sell cryptocurrencies such as Bitcoin and Ethereum, conveniently exchanging them to and from Japanese yen. But yen isn’t your only ticket to ride the cryptocurrency train: Rakuten Wallet users can also use their Rakuten Points to top up their portfolio. The service sweetened the deal even further, introducing a new way for users to convert their assets back into a spendable currency. For no cost, users can now turn their Bitcoin and Ethereum into Rakuten Cash — tied to the Japanese yen and functionally similar to Rakuten Points" (emphasis mine.)

From the above, it would appear that Rakuten did not go forward with its original plan of minting alt-coin (Rakuten Coin) from its loyalty points (Rakuten Points).

That said, by permitting consumers to convert Rakuten Points to cryptocurrencies and those cryptocurrencies back to Rakuten Cash, the Japanese conglomerate has achieved "Unlimited liquidy" and "Buoyancy", the two defining characteristics of a blockchain loyalty program that I'd outlined in my original post. So Rakuten is effectively running a blockchain loyalty program.

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It's not only Rakuten. Many other firms have launched blockchain loyalty programs in the four years since I published my original post on this subject. This includes:

Bakkt: Starting out as a cryptoexchange, Bakkt pivoted into a blockchain loyalty platform / wallet app that unlocks one trillion dollars of digital assets.

J P Morgan Chase: In its article entitled JPMorgan to turn loyalty points into tradeable assets, Finextra reports that America's largest bank has partnered with fintech startup Affinity Capital Exchange to create a new class of financial assets based on the trading of loyalty point portfolios.

Lolli: This startup runs a bitcoin-based loyalty program that rewards consumers with the world's #1 cryptocurrency for shopping at 1000+ stores.

TYB: Try Your Best issues loyalty reward points in AVAX cryptocurrency. Built on the Avalanche blockchain, TYB helps brands to wean away from excessive dependency on pricey ads on Facebook, Instagram, Snap, and other third-party social media platforms. See TechCrunch article titled Athleisure icon Ty Haney raises $9.8M in fresh funding for her blockchain rewards startup for more details.

While blockchain loyalty programs have not yet gone mainstream, they have certainly gained serious traction in the last year or two.

So, sizzling is the right answer!

DISCLAIMER: The Blockchain world has an eclectic mix of elements like cryptocoin, ICO, and so on whose legal status is ambiguous and swings wildly between various states of the spectrum such as illegal, maybe-illegal, not-illegal and legal and from one country to another. Before following through with the guidance given in this post, please consult your legal counsel about their legal status in your respective jurisdiction. We offer no guarantees as to legality of any of the guidance provided in this post.