Walmart and Amazon are reportedly exploring the use of stablecoins as a new method for shoppers to pay for goods, which could have a significant impact on traditional banking giants. This move could lower transaction fees, improve global payment efficiency, and reduce reliance on traditional payment methods. However, both companies are still waiting to see how stablecoin regulation unfolds.
1. What Are Stablecoins?
Stablecoins are a type of cryptocurrency designed to maintain a consistent value by being tied to a physical currency (like the U.S. Dollar) or commodities such as gold. Unlike highly volatile cryptocurrencies like Bitcoin, stablecoins offer more stability, which makes them more attractive for digital payments.
2. Why Walmart and Amazon Are Interested
The potential use of stablecoins by Walmart and Amazon aims to streamline the payment process, especially for global transactions. By adopting stablecoins, these companies could:
- Lower processing fees
- Make global payments more efficient
- Reduce dependence on traditional bank transfers.
Both companies are watching how stablecoin regulation unfolds, especially through the GENIUS Act, which could regulate stablecoins within the U.S.
3. What Is the GENIUS Act?
The GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) was recently advanced in the Senate. The proposed legislation seeks to create a federal and state-regulated framework for the $238 billion stablecoin market. If passed, it could allow companies like Amazon and Walmart, along with major banks, to issue and hold stablecoins.
This regulatory framework could also allow retailers to accept digital payments in stablecoins, which could fundamentally change the way people shop.
4. Banking Giants Exploring Stablecoins
In addition to Amazon and Walmart, big banks like Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo are also exploring stablecoins as part of a joint effort. This growing interest in stablecoins could transform the financial landscape, especially as FinTech companies and payment processors begin to use these digital currencies.
5. Expert Predictions on the Future of Stablecoins
Bentzi Rabi, CEO of Utila, a crypto digital asset platform, stated that moving toward stablecoins is inevitable. He emphasized that companies and banks looking to enter the stablecoin space need to ensure secure infrastructure to create, hold, and transfer assets.
“Everyone will enter the stablecoin era in the end,” Rabi said.
As more companies look to adopt stablecoins, the financial sector could witness a shift in how digital transactions are made.
6. Political Support and Opposition
The GENIUS Act has garnered both support and criticism from politicians.
- Supporters like Senator Bill Hagerty (R-Tennessee) argue that the U.S. must act quickly to maintain global competitiveness. Without regulatory action, stablecoin innovation may shift to other countries.
“If we fail to act now, we will fall behind in global competitiveness,” said Hagerty.
- Opponents, such as Senator Jeff Merkley (D-Oregon), express concerns about the lack of protections in the bill, particularly against potential corruption. Critics argue that the legislation fails to include necessary safeguards to ensure fairness in the market.
7. What’s Next for Walmart and Amazon?
Should the GENIUS Act pass, Amazon and Walmart could lead the way in adopting stablecoins for digital payments, potentially transforming how consumers shop online and in-store.
Both companies are also making significant moves in other areas:
- Walmart’s CEO recently announced a four-step plan to reduce prices and offer more American-made products.
- Amazon’s CEO has also issued a warning that additional costs may soon be passed on to shoppers due to rising costs.
