Poachers turning to gamekeepers
According to The Wall Street Journal, two of the world’s largest retailers, Amazon and Walmart, are considering moving into cryptocurrencies, which could be a seismic shift for the way in which payments are taken. Until recently, cryptocurrencies have been regarded by many sceptics as little more than a highly volatile speculative tool. Detractors argue that crypto has no real ‘currency’ in the real world and can only be used in niche markets. However, all of that could be about to change in the United States.
Before you rush out and start worrying about integrating payment platforms that accept Bitcoin and Ethereum, it should be noted that these are tentative considerations around stablecoin offerings and are part of a shake-up currently being voted on in the US. If the US GENIUS Act is approved, this could be the beginning of a payment revolution led by these two giants. Stablecoins are pegged to the US Dollar, but rather than being issued by governments, they are built on blockchain technology and loved by libertarians.
Crypto unleashed
While early adopters dreamed of a cryptocurrency world outside the grasp of traditional financial giants, it is interesting to note that Amazon and Walmart’s news comes weeks after US banking giants like Citigroup, Bank of America, Wells Fargo, and JP Morgan Chase announced they were engaged in early-stage discussions about a collaborative stablecoin project. Would it be cynical to suggest that these announcements are, therefore, the polar opposite of the original vision people had for crypto, which was intended to be out of the hands of global institutions? Or is it ok if the institutions in question are anti-institution themselves? Like all things to do with MAGA Republicanism, it seems as though the precautionary principle might be ignored.
Monopolistic power
Upon closer inspection, what we actually see is that Walmart and Amazon are potentially positioning themselves in opposition to the traditional financial system. They are not currently considering accepting crypto payments through existing coins, but are exploring the idea of issuing their own stablecoins. Anyone concerned about retail dominance being concentrated into an ever-decreasing number of operators would be forgiven for wondering where this move could lead. The move could shift high volumes of cash and card transactions outside of the traditional financial system.
The advantage to retail giants would be massive savings in fees. In theory, this could mean the giants would have even more power and control of the market as their cost base would be lowered. However, while cost savings are often promised to consumers, they are rarely passed on to them. What has been observed is that companies like Amazon and Walmart use lowered prices to drive out the competition. However, once they have established control of the market, it is the shareholders who benefit at the expense of consumers. Economic theorists can teach about economies of scale being beneficial, but once they become monopolies, consumers lose out.
Moving with the times
The cryptocurrency world is moving at a rapid pace, and industries that do not adapt may find themselves struggling to survive. A good deal depends on what regulation is introduced, but as is often the case with tech and fintech, legislators are often trying to bolt the stable door after the horse (or the stablecoin, in this case) has bolted. This is particularly true in the online casino world, which has been one of the industries that has long accepted crypto payments. While a review site like Casino.co.uk guides gamblers to the best casino sites in the UK, the UK Gambling Commission is still vacillating about licensing and regulating crypto casinos.
If we have learned one thing from the social media age, it should be that things progress with or without legislative frameworks. Therefore, moves to accept alternative payments might move faster now that Walmart, Amazon, and major US banks are getting in on the act. Amazon is a far cry from the online bookseller it set out to be, and its worldwide 2024 revenue was reported at a staggering US$638 billion. Nearly all its income is derived from retail sales. It is not hard to understand why the possibility of it issuing a stablecoin for use on its platform is causing alarm in some quarters.
Seismic shifts
Walmart’s $122 billion net sales for the fiscal year ended January 2025 might appear small in comparison to behemoth Amazon, but anyone trying to stay afloat in retail would envy those massive sales. Both companies are growing at a phenomenal rate – Walmart’s sales were up almost US$7 billion on the previous year. If either of these companies makes a move, it will be felt across a wide range of industries. Keeping up and abreast will be crucial. The UK government might not be as far down the line as US lawmakers, but change is inevitable.
Stablecoins are designed to mirror the value of stable currencies, such as the UK Pound, the US Dollar, and the Euro. Unlike cryptocurrencies, they are not highly volatile and are therefore suitable for everyday transactions. Global companies like Amazon and Walmart issuing their own currencies could be seen as a direct threat to the nation state’s ability to regulate its markets. However, the fact that they are pegged to fiat currencies means that there would need to be compliance (in the short term, at least) to get them established and trusted.
Will stablecoins make the world more volatile?
While the world itself seems to be volatile at the moment and while these cryptocurrencies are being touted as stable, they still have a feeling of the wild west about them. While the Bank of England has been the safe pair of hands behind the UK monetary system for over 300 years, the US Federal Reserve only came into existence in 1913 to bring order to the issuing of dollars. The US GENIUS Act, which seeks to allow American firms like Amazon and Walmart to issue their own currencies, could have far-reaching effects that are yet to be fully realised. All we can say for now, is watch this space.
