The Wall Street Journal reported today that Amazon and Walmart are exploring potentially issuing their own stablecoins, or failing that, using an existing one. A lot depends on the outcome of the GENIUS Act stablecoin legislation winding its way through the Senate. Another e-commerce giant mulling a digital currency is travel firm Expedia.
While Amazon and Walmart likely pay lower fees than some merchants, for credit cards the charges are around 2.9%, whereas on many blockchains, the fees can be negligible. Additionally, there are delays in receiving the funds from card payments, whereas the receipt of stablecoin funds can be almost instant.
One of the options being considered is a consortium of merchants led by a stablecoin issuer. We’d observe that the Global Dollar stablecoin initiated by Paxos has a similar consortium structure for financial services companies, which share in the interest revenues on the stablecoin balances.
The timing of the news is rather awkward for the stablecoin legislation. Democrats have been arguing that there are insufficient restrictions on Big Tech firms. This week Senator Warren wrote to Meta asking if it was again exploring the issuance of a stablecoin. Facebook initiated the Libra stablecoin consortium in 2019, but the group gave up after repeatedly being obstructed by regulators.
While the GENIUS Act received sufficient bipartisan support in a procedural vote this week, some of the Democrats that dissented are doubtless lobbying their colleagues to highlight that this news proves their concerns are well-founded. A final vote on the legislation is expected next week. There’s also a separate STABLE Act being debated in the House, with the two needing to be consolidated for a final stablecoin law.
Next week we’re publishing a series of articles on stablecoins for retail payments. Watch this space!
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