Amazon Walmart Explore Stablecoins to Cut 3% Credit Card Fees

Amazon and Walmart, two of the world's largest retailers, are reportedly exploring the possibility of issuing their own stablecoins. This move is driven by the potential to reduce the significant fees associated with credit card transactions, which include interchange fees paid to providers. Stablecoins, a type of cryptocurrency pegged to a stable asset like the U.S. dollar, offer a way to mitigate the volatility typically associated with other cryptocurrencies.

By issuing or accepting stablecoins, these retailers could operate a payments system that bypasses traditional banking and credit card networks. This shift could result in substantial savings, as the fees paid to intermediaries are eliminated. The potential savings are considerable, given the billions of dollars these companies currently pay in transaction fees.

The exploration of stablecoins by Amazon and Walmart is not an isolated trend. Other major companies, including Expedia and several airlines, have also considered this option. However, the issuance of stablecoins by private companies requires regulatory support. The Senate is currently considering a bill known as the Genius Act, which aims to establish a framework for private companies to issue stablecoins. This legislation has passed an initial procedural vote but still needs a full floor vote in both chambers of Congress.

The adoption of stablecoins by these retail giants hinges on the passage of the Genius Act. If the bill is enacted, it would provide the necessary regulatory environment for companies to issue their own stablecoins, potentially revolutionizing the payments landscape. This move could lead to faster settlements and reduced transaction costs, benefiting both the retailers and their customers.

The potential impact of stablecoins on the retail industry is significant. By reducing reliance on traditional payment systems, retailers could gain more control over their payment processes and potentially offer more competitive pricing to consumers. However, the success of this initiative will depend on the regulatory framework and the willingness of consumers to adopt this new form of payment.