Major retail giants Walmart and Amazon are planning to introduce their own digital currencies, known as stablecoins.
Modern Retail Titans Mulling Over Crypto Payments
Big names in retail, such as Walmart and Amazon, have tossed around the idea of creating their very own stablecoins, potentially shaking up the world of customer transactions by slashing billions in annual credit card commission fees.
Stablecoins, cryptocurrencies anchored to the US dollar's value, exhibit a steady price trajectory unlike Bitcoin's staggering ups and downs.
If Amazon were to plunge headfirst into this digital currency pool, say by launching its own stablecoin or embracing existing ones for payments, it could pave the way towards lesser dependence on conventional payment processors like Visa and Mastercard. The resulting savings on annual transaction fees would likely reach for the stars.
Bonus: Societe Generale's Stablecoin Soars on Ethereum and Solana
According to The Wall Street Journal, an array of businesses apart from Amazon and Walmart—companies such as Expedia and certain airlines—are also wrestling with this very thought. However, for the private sector to enter the stablecoin game, a legal framework needs to be put in place. Enter the Genius Act, a bill proposed in the U.S. Senate, aiming to create these conditions for companies to unleash their stablecoins. The Genius Act cleared its initial hurdle with a thumbs up, but it still needs the go-ahead from the House of Representatives and the full Senate before it gets to becoming the law of the land.
As the Genius Act triumphs in the Senate, Visa and Mastercard shares seem to have taken a nose dive, dropping roughly 5%.
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But wait, there's more!
The Genius Act Journey in the Senate
- Cloture Victory: On May 19, the Senate voted to bring an end to debate on the bill, accruing 66 votes in favor. This decisive step propels the bill forward despite initial reservations from Democrats[3].
- Final Thumbs Up: On June 11, the Senate came close to concluding the bill's approval process with a 68-30 vote, bringing final passage within reach[5].
Genius Act Highlights:
- The bill would provide banks with the authority to custody stablecoins and reserves, dabble in blockchain technology, and even tap into tokenized deposits[1].
- However, it faces criticism from some lawmakers, such as Senator Elizabeth Warren, who voice concerns over consumer protections and national security threats[3].
The House's Role
While the Senate gives the Genius Act a run for its money, the House of Representatives is concurrently pushing legislation related to crypto market structure, namely the Digital Asset Market Clarity Act[5].
The Path Ahead
If the Senate seals the deal, both House legislation and the Genius Act would need to be harmonized before receiving the President's signature. Should that happen, the Genius Act could become the United States' first stablecoin law, henceforth catalyzing the institutional adoption of blockchain technology[4].
- If Amazon were to adopt or develop a stablecoin for payments, it could potentially reduce its reliance on traditional payment processors like Visa and Mastercard, significantly lowering the annual transaction fees.
- The passing of the Genius Act in the Senate could encourage businesses, including companies like Expedia and certain airlines, to venture into the stablecoin market, as it aims to create legal conditions for the private sector to launch their stablecoins.
