Walmart Amazon Explore Stablecoins to Cut Transaction Costs by 50%

Walmart and Amazon, two of the world's largest retailers, are actively exploring the issuance of their own stablecoins. This move could significantly alter the traditional payments ecosystem by providing a more efficient and cost-effective way to process transactions. Stablecoins are digital currencies pegged to the value of the U.S. dollar, offering several advantages over traditional payment methods.

The primary motivation for Walmart and Amazon to consider stablecoins is the potential to reduce transaction costs. Currently, both companies pay billions in fees to credit card networks and banks. By adopting blockchain technology, they aim to cut these costs and speed up refunds and settlements. Stablecoins offer lower costs by eliminating the need for a credit card middleman, quicker payments with almost immediate transfers, greater control over processing refunds, loyalty points, and customer rewards, and a safe and transparent system where every transaction is logged on the blockchain.

However, the firms are not proceeding with their plans just yet. They are awaiting the outcome of the GENIUS Act, a U.S. bill that seeks to establish definitive guidelines for stablecoins. If passed into law, Walmart and Amazon could issue their own tokens legally without any doubt. The GENIUS Act, backed by U.S. legislators, aims to legislate the issuance of digital dollars by firms, providing a clear regulatory framework for the use of stablecoins.

In addition to issuing their own stablecoins, Walmart and Amazon are also considering the use of existing stablecoins such as USDC or PayPal USD. However, having their own branded stablecoin would give them complete control over the system. This control would allow them to tailor the stablecoin to their specific needs and integrate it seamlessly into their existing payment infrastructure.

There is also discussion about creating a merchant stablecoin group, where large retailers such as Target or Costco could join Walmart and Amazon to create a joint token or work on a joint blockchain platform. This collaboration would make it simpler for customers to use digital cash and reduce the sector's dependence on traditional banking. All large retailers would then use the same kind of digital cash, streamlining the payment process and enhancing customer convenience.

In summary, Walmart and Amazon's exploration of stablecoins represents a significant shift in the retail payments landscape. By adopting stablecoins, these retailers aim to reduce transaction costs, speed up payments, and gain greater control over their payment systems. However, they are awaiting regulatory clarity from the GENIUS Act before proceeding with their plans. The potential for collaboration with other retailers on a common token further underscores the transformative potential of stablecoins in the retail sector.