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Key takeaways

  • Amazon and Walmart are considering issuing their own stablecoins or acquiring an existing stablecoin.
  • Expedia is also looking into developing a digital currency to cut costs and operate more efficiently.
  • The GENIUS Act is facing opposition in the U.S. from some Democrats who see it as evidence of unchecked power by Big Tech companies.

Reports indicate that retail giants Amazon and Walmart are considering issuing their own stablecoins or possibly acquiring an existing stablecoin. The feasibility of these plans depends on the outcome of the GENIUS Act, stablecoin legislation currently being debated in the U.S. Senate.

Expedia, another major player in the e-commerce sector, is also exploring the development of a digital currency. The attraction for these companies lies in the potential cost savings and efficiencies that stablecoins offer compared to traditional payment methods. Processing costs for credit cards can be significant, averaging about 2.9 percent, while blockchain transactions often have negligible costs.

Options for Amazon and Walmart

One option Amazon and Walmart are considering involves a consortium of merchants led by a stablecoin issuer, similar to the structure used by the Global Dollar stablecoin initiated by Paxos. Under this framework, financial service providers could share in the interest income generated from stablecoin balances.

Big Tech research

The timing of this news coincides with heightened scrutiny of Big Tech companies and their potential impact on the financial system. Senator Warren's recent question to Meta about their intentions to issue stablecoins underscores this concern and references Facebook's previous attempts with the Libra stablecoin consortium, which ultimately ran into regulatory hurdles.

GENIUS Act and STABLE Act

The GENIUS Act(Government-issued Electronic Note and Innovation for the Ubiquitous Settlement) is intended to provide a legal framework for stablecoins and digital payment methods.

While the GENIUS Act received bipartisan support in a procedural vote, it faces opposition from some Democrats who see this development as evidence of their concerns about the unchecked power of Big Tech companies. A final vote on the legislation is expected next week.

Meanwhile, the STABLE Act(Stablecoin Tethering and Bank Licensing Enforcement) being debated in the House of Representatives presents an alternative approach to regulating stablecoin.

Eventually, the two bills may be merged into one unified stablecoin bill.

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