One area that immediately springs to mind is how Coins will interact with Kindle FreeTime. This is the service that provides a walled garden inside the Kindle Fire Android tablets and allows children to play and explore, with their parents reassured that they can’t run up bills or order anything from the Amazon store.

I can easily see FreeTime having its own ‘balance’ driven by Amazon Coins purchased by the parents so children can have some digital pocket money to spend as they see fit, but only the fixed amount transferred into the FreeTime account by their parents. 200 coins a month, does that feel about right?

It’s the options available to Amazon if they move Coins away from an alternative way to buy apps but start to provide developers tools to use Coins as an in-app currency that really interest me.

I hope Amazon will make this as simple as possible for developers to use, and provide an SDK that will work over all Android devices (not just the Kindle Fire). If so they can provide developers an alternative to Google Play for in-app purchasing. While the exchange rate at the moment is set to 1 coin per US cent, I’m sure that there will be special offers and exchange rates to kick start the program. Amazon has shown before they’re happy to buy the hearts and minds of Android developers to get them coming through their stores.

Competition is going to be good for the Android ecosystem, and Google Play against Amazon Coins for in-app purchasing is going to be an interesting struggle to watch.

Amazon of course want to bring more developers to their attention, and be able to ensure the best apps are available in the Amazon App Store. The Amazon Coin SDK will give them another engagement opportunity, and data points for applications and techniques that are earning money.

This increase of income streams might seem, in the short term, to be a problem for the users. After all, aren’t they going to be expected to pay more so developers see more money? That is true, but margins and profits in the mobile app space (especially on Android) are not stunning. Without revenue flowing to the developers, there will be no high quality app economy. In the long term, if Amazon Coins can reward developers while feeling fair to users encountering the service in their apps, then this is for the benefit of the whole app ecosystem on mobile devices.

And another thought. Amazon Coins can potentially add more to Amazon’s bottom line than the conversion fee to move between the virtual currency and hard cash. People buying coins are unlikely to spend all the coins in one transaction. Which leaves Amazon with a nice cash pile of purchased but unspent coins. It might not start out large, but if Coins becomes established, with millions of users, expect Amazon to work this reserve for their benefit.

As announced today, Amazon Coins is a one way street, to ‘load up’ an account that can be used to buy applications in the Amazon App Store. But let’s not skate to where the puck is, let’s skate to where Jeff Bezos’ puck is going to be. Which is a time when Amazon will have a micro-currency established across the Android ecosystem, when developers have an attractive alternative that provides them a solid income stream, when users are encouraged to spend their money and reward the developers.

That’s something I can see fitting in perfectly to Amazon’s ethos and strategy.