On August 1, it was made public that Walmart had filed a patent for a stablecoin backed by the US dollar.
If the project would come to an end, the stablecoin would be issued to some of the chain-store retailers. The description of the patent also covers the use of this stablecoin outside of this use case.
This announcement comes after the controversy with the cryptocurrency announced by the social media giant, Facebook, and the specifications of the two have a striking similarity.
What does Walmart patent say?
The entire crypto community, from all over the world had started taking an interest in all of these projects announced by big-names corporations.
The announcement of Libra, on the 18th of June, will be remembered for a long time for now on, as everyone is still speculation oh how this will be regulated and adopted (or not) by the community. They hope to launch it in 2020.
Of course, this got the US politicians to look more into is and so for, Facebook got a regulatory pushback from global leaders and threats by U.S. members.
Now as Walmart made this step towards building its own cryptocurrency, the company enters the ring as well.
Walmart’s coin could be used in its 11,368 hypermarkets, department stores and grocery store clubs situated in 27 countries.
The Walmart patent is described like this:
“[The] method includes: generating one digital currency unit by tying the one digital currency unit to a regular currency; storing information of the one digital currency unit into a block of a blockchain; buying or paying the one digital currency unit.”
“The digital currency may be pegged to the US dollar and available for use only at selected retailers or partners. In other embodiments, the digital currency is available for use anywhere. The digital currency can provide a fee-free, or fee-minimal place to store wealth that can be spent, for example, at retailers and, if needed, easily converted to cash,” Walmarts filing adds.
What does Walmart’s patent bring to the table?
At a closer look proves that the Walmart coin delivers numerous attributes like “pre-approved biometric (e.g. eye or fingerprint pattern) credit” and could keep a user’s transaction history and provide loyalty points. Much like Facebook’s Libra, the coin made by Walmart intends to help low-income households globally.
“Using a digital currency, low-income households that find banking expensive may have an alternative way to handle wealth at an institution that can supply the majority of their day-to-day financial and product needs,” the Walmart submitting details.
“In some embodiments, retailers may be direct to aid organizations for assistance that may be used to provide goods. Retailers may tie into assistance that can provide vehicles or funding for vehicles to get goods to customers when the customers do not have sufficient mobility otherwise,” the patent shows.
Walmart’s coin to be used to pay employees?
A number of the speculation concerning a Walmart cryptocurrency is hard to digest, and these are some of the issues:
Imagine paying the 2 million employees that Walmart has in cryptocurrency. Those of you who have been in a Walmart store might be giggling now, but let’s make it more clear for those who haven’t been to one of their stores.
It seems highly unlikely that the people working at Walmart are the kind interested to be part of the international crypto market. Assuming that the workers are actively militating for such a change, Walmart would have to change its systems to pay salaries in cryptocurrency and that’s not an easy thing to do, or cheap.
Introducing the banking system
The idea of bringing decentralization to the masses and “banking the unbanked” as a benefit of cryptocurrency is not a good enough reason for the regulators. A study from Aite Group found that half of the unbanked are using prepaid debit cards, which is an alternative to having a bank account.
“Customers without traditional bank accounts can create a microbank at an institution such as a retailer, which gains interest while their money is there. A customer buys digital currency, such as at the beginning of a month.”
Walmart’s patent meeting regulatory bodies
Jaret Seiberg, a senior policy analyst in investment banking firm Cowen, stated that Walmart’s proposed electronic coin shouldn’t face as much regulatory pushback as Libra, Facebook’s suggested virtual money.
As Bloomberg reports on Aug. 5, Seiberg additionally added that Walmart’s crypto could have a market appeal to Democratic legislators that are eager to get an alternate financial infrastructure for individuals that don’t frequently utilize banks.
Seiberg remarks that Facebook has international intentions that do not seem to be shared with Walmart.
Walmart’s proposal won’t probably find automated approval from Congress. Seiberg pointed out that, for example, Walmart’s coin may be regarded as a danger to banks and credit unions. However, Seiberg considers that lawmakers would finally approve Walmart’s proposal.
Concerning the specifics of Walmart’s projected money, Seiberg composed to customers on Monday the money may arrive in the kind of a stored-value card that’s pegged to the U.S. buck, somewhat like a rechargeable card.
According to the report, a Walmart spokesperson said on Friday, 2nd of August 2019, that it’s not likely to immediately make the most of its own newly-filed patent.