AMAZON and Walmart are eyeing a new payment method for shoppers this year.
The change could also potentially impact banking giants moving forward.
2
2
Consumers could soon see stablecoins issued by the two companies, according to a report from The Wall Street Journal.
Stablecoins are a type of cryptocurrency that attempt to maintain a consistent value, a difference in that of volatile options like Bitcoin.
That’s because stablecoins are tied to a physical currency like the United States Dollar (USD) or even commodities like gold.
The stablecoin options Amazon and Walmart are looking into would be tied to the USD.
Moving toward this option would ideally help lower processing fees, make global payments more efficient, and reduce dependence on traditional transfers of funds.
Neither company is moving ahead just yet, but rather watching how stablecoin regulation comes to pass through the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.
It was advanced by the Senate earlier this month, but its fate still remains uncertain, per CNBC.
The GENIUS Act seeks to create a federal and state-regulated framework for what has become a $238 billion market for stablecoins.
This would mean that retailers and companies like Amazon and Walmart, along with top banks, could hold and issue the digital currency.
Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo are also exploring a joint stablecoin.
It could be consistently used by consumers, as with Amazon and Walmart’s, for digital payments.
Bentzi Rabi, CEO and co-founder of Utila, a crypto digital asset operations platform, said the move toward stablecoin is inveitable.
“When you think of the needs of every FinTech or payments company, or a bank that wants to enter the [stablecoin] space, they need to secure infrastructure, from the creation of assets, such as tokenizing them, to holding them, and of course moving them,” Rabi told PYMNTS recently.
“Everyone will enter the stablecoin era in the end.”
What is cryptocurrency?
CRYPTOCURRENCIES are a form of payment that can be exchanged for goods and services.
FIRST OR LAST?
There’s been support and criticism across the board among politicians regarding the GENIUS Act.
Some supporters argue that the United States will be too late to the game if the GENIUS Act isn’t implemented soon.
“If we fail to act now, not only will these benefits slip away — we will also fall behind in global competitiveness,” Senator Bill Hagerty (R-Tennessee), who introduced the legislation, argued last week.
“Without a regulatory framework, stablecoin innovation will proliferate overseas — not in America!”
MORE PROTECTIONS
On the other side, some claim the GENIUS Act doesn’t provide enough protection against potential corruption, like officials favoring certain stablecoins.
“We need guardrails that ensure that government officials aren’t openly asking people to buy their coins in order to increase their personal profit or their family’s profit,” Senator Jeff Merkley (D-Oregon) said during a recent Senate session.
“Where are the guardrails in this bill? They’re completely, totally absent.”
Time will tell whether or not the retailers or banks invest in stablecoin, should the bill get passed.
Walmart and Amazon have also been making other significant decisions recently.
In April, Walmart’s CEO announced a four-step solution to bring down prices and promised more American-made products.
Amazon’s CEO also issued a warning to millions of shoppers about potentially added costs getting “passed on” soon.
