Major Retailers Eye Stablecoins Amid GENIUS Act Debate

Senator Elizabeth Warren and leading consumer advocacy groups have expressed strong opposition to a report indicating that major retailers, including Amazon and Walmart, are considering the issuance of their own stablecoins. This development is seen as a potential outcome of the pending GENIUS Act, a stablecoin bill currently under consideration in the Senate.

Warren, who is the Ranking Member on the Senate Banking Committee, highlighted a significant loophole in the GENIUS Act that could allow major corporations to issue their own dollar-pegged cryptocurrencies. She warned that this could lead to billionaires like Elon Musk, Jeff Bezos, and Mark Zuckerberg launching stablecoins that could track consumer purchases, exploit data, and squeeze out competitors. Warren emphasized the need for Congress to address these risks before the bill is passed.

The GENIUS Act, if passed, would establish the first legal framework for issuing stablecoins in the United States. Stablecoins are cryptocurrency tokens typically pegged to the U.S. dollar, serving as a bridge between traditional financial markets and the crypto world. The bill is expected to pass a final vote in the Senate early next week, after which it will need to be approved by the House and signed by the President.

The motivations for major retailers and tech companies to issue stablecoins are multifaceted. Tech firms could use stablecoins to gather financial data on customer spending habits, while merchants could bypass traditional payment processors that charge billions in fees annually. Additionally, issuers of stablecoins could earn passive yield on customer deposits, providing a strong incentive for traditional finance players to enter the sector.

Consumer advocacy groups have raised concerns about the potential risks associated with allowing tech companies to issue private currencies. Corey Frayer, director of investor protection at the Consumer Federation of America, noted that this could amplify financial stability risks and give a small set of corporations immense power over consumers and the broader economy. Amanda Fischer, policy director at the consumer advocacy nonprofit Better Markets, questioned how independent businesses could compete if major corporations were running unregulated banking side-hustles.

Despite the opposition, the GENIUS Act is widely expected to pass, given that key Democrats have come back aboard the legislation. However, Senator Josh Hawley (R-MO) has recently come out against the bill, describing it as a "huge giveaway to Big Tech" that allows these companies to issue stablecoins without adequate controls.

The growing interest from major traditional companies in stablecoins indicates that these digital assets are gaining traction beyond the crypto-native ecosystem. This shift suggests that industries are increasingly viewing digital assets not just as speculative tools but as foundational infrastructure. The momentum behind stablecoin legislation underscores the urgency of establishing a clear regulatory framework for these financial instruments.