Various companies, individuals, and even governments have shown their interest in creating new digital currencies. In all cases, these new assets are linked to existing currencies of sorts, whether it is a US Dollar, Euro, or something else entirely. Walmart has recently filed a patent which seems eerily similar to that of Facebook’s Libra project. It seems the competition for issuing unregulated digital currencies is heating up in full force.
Walmart Eyes the Financial Sector
For those people who are not familiar with Walmart, it is important to note the company’s history. Over the years, the popular chain has ventured into a few different financial projects, albeit on a limited scale and with even more limited success. Its option to let users benefit from money transfers which can be sent between Walmart stores is perhaps the most successful venture to date. As such, it is not entirely unexpected to see this major company look at digital currencies. Rather than accepting Bitcoin for payments, it seems the company leans more toward creating their own digital currency which is tied to regular currency.
How a retail giant would pull off such a venture, is an entirely different matter. At the same time, one could say the same about technology companies exploring similar options, as those do not have any real ties to the financial sector either. For all intents and purposes, it appears Walmart wants to create a stablecoin of sorts, but one that would only be used as part of their own stores and products. It is difficult to determine if there is a market for this particular offering, but no stone should be left unturned in this regard.
Offering Banking Services
The patent filing in question seems to confirm Walmart wants to position itself as a banking services provider. Not necessarily in terms of bank accounts and insurance, but rather an alternative form of finance which would otherwise remain inaccessible. Even in the United States, there are a lot of people with limited or no access to traditional banking services. Considering how this chain is also one of the biggest brands across the US, it makes sense to explore some different options and attract even more customers.
By actively pegging this new digital currency to the US Dollar, the company is exploring an interesting market opportunity. The plan is to make the currency available for use at selected retailers and partners. As such, it seems the functionality of this new currency will be fairly limited at first, but that is something which can easily change over time. It also seems the plan is to remove fees from the equation or keep them to a bare minimum in a worst-case scenario. This new currency can also be converted to cash, although specific details regarding that option have not been provided as of yet.
Earning Interest With Walmart Coin
Perhaps the most intriguing feature of this patent is how Walmart aims to let holders of their digital currency earn interest. That is a very specific aspect of a new currency which will raise a lot of questions from regulators and policymakers. This also makes the venture very different from what Facebook has planned. Even though Libra holders will also earn interest those funds will be distributed among project partners which initially backed the company. That in itself is another reason why Facebook’s project has drawn so much criticism since it was initially announced.
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