Banks Stopped Walmart Bank – Now the Retail Giant Hits Back With Crypto

On August 1, it was discovered that the giant retail corporation Walmart has patented plans for a stablecoin that’s backed by U.S. dollars. If released into the wild, the USD-based cryptocurrency would be issued to select Walmart retailers and partners while the patent’s description explains the coin could be used outside of Walmart’s retail scope as well. Walmart’s patent follows Facebook’s recent Libra announcement and the ‘Walmart coin’ specifications are similar to the social media giant’s project as well.

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Walmart Files Patent for a Digital Stablecoin Back by USD

Big-name corporations have been announcing the creation of their very own cryptocurrencies and the news has been a hot subject within the crypto community. It all started on June 18 when Facebook announced the launch of Libra, a stablecoin that will be available in Messenger, Whatsapp and as a standalone app, with the company expecting to launch the product in 2020. However, Facebook’s project riled up politicians and immediately got regulatory pushback from worldwide leaders and threats from U.S. congressional members.

Now Walmart is stepping into the ring to test its own blockchain technology as the company has filed a new digital currency patent that describes a stablecoin backed by USD. Walmart’s coin, if developed, could be easily be tested at its 11,368 hypermarkets, department stores and grocery clubs located in 27 countries. The Walmart coin was created by Robert Cantrell, David Nelms, John O’Brien, and Brian McHale. The patent’s abstract description states:

“[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.

Walmart Coin Aims to Help Low-Income Households That Find Banking Expensive

A closer look at the filing shows that the Walmart coin concept offers a number of features like “pre-approved biometric (e.g., fingerprint or eye pattern) credit” and could store a user’s transaction history and give loyalty points. Much like Facebook’s Libra, the coin produced by Walmart aims to help low-income families worldwide. “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 filing details. “In some embodiments, retailers may be directly 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 reveals.

Is Walmart Coin the Corporation’s Second Attempt to Become a Bank?

The news comes years after Walmart attempted to become an industrial loan company (ILC) but got pushback from politicians and regulators. Bankers and anti-Walmart groups forced politicians to pass laws to stop Walmart in its tracks from opening bank branches. Because of the opposition, Walmart’s application filed with the Federal Deposit Insurance Corporation (FDIC) never gained traction.

Just like when Facebook announced Libra, congressional leaders scheduled two public hearings with Walmart over the ILC attempt. During the end of the debate against massive opposition, Walmart removed certain retail banking goals and focused solely on payment processing. Interestingly, the department store’s competitor Target was granted approval by the U.S. government to operate an ILC but skeptics think Walmart’s ILC idea was too broad. The Walmart ILC filing filed in 2005 sat with the FDIC until the corporation withdrew the request in March 2007. “We notified the FDIC today that Walmart has withdrawn the application we made in July 2005 for an Industrial Loan Company (ILC) charter,” the company revealed at the time.

Walmart’s latest patent filing could be another attempt to enter the banking ecosystem with a cryptocurrency instead of operating bank branches. The digital managing institution could be assigned to an independent third-party institution, Walmart’s filing highlights. Moreover, the Walmart coin could offer users interest applied to savings accounts, tied to the digital currency. “The savings can be greater when the customer buys goods that are on their shopping history and are therefore predicted,” the company patent notes, adding:

Savings further making the digital currency a more attractive option for customers, and overall creating a positive cascade.

Facebook and Walmart Coins That Have a Central Authority of Control Are No Threat to Cryptocurrencies Like Bitcoin

Of course, after the cryptocurrency community got wind of the Walmart coin patent filing the digital currency was compared to Facebook’s Libra attempt. Coincorner’s CEO Danny Scott doesn’t believe a Walmart cryptocurrency will be competitive against BTC. “Following the announcement of Facebook’s Libra in June, this news was certainly not unexpected – in fact, we expect to see more FAANG companies filing patents for their own cryptocurrencies in the coming months,” Scott wrote to news.Bitcoin.com. “However, while the publicity is obviously good news for the crypto industry, we believe it is a waste of time and resources for these companies – something that will eventually show as time passes,” the CEO added. Scott further stated:

There are already a number of decent stablecoins out there, all doing exactly the same job. The likes of Walmart or Facebook are not bringing anything new to the table, they are just hoping that with a household name behind it, their coin will naturally succeed and become the default choice.

Scott thinks that since the Libra announcement the coin has “opened a can of worms with regards to regulatory concerns” and the company recently admitted the project may not continue because of the regulatory climate. The Coincorner CEO says that Walmart’s attempt will be no different, and to him it doesn’t matter how big and influential these corporations are, the executive opined. “We remain unconcerned with regards to the risk that “Facebook Coin” or “Walmart Coin” or “The Next Big Company Coin” pose a threat to Bitcoin,” Scott stated. “No matter how big the name behind these coins, for as long as there is a central authority with control, Bitcoin has no competition.”

While a patent shows Walmart is thinking about the concept of introducing a cryptocurrency, it hasn’t officially announced making a coin as Facebook did. Crypto spectators and financial pundits will be monitoring Walmart’s idea, but for now the concept is in its very early stages as a simple patent filing. Just as President Donald Trump warned Facebook, it’s likely U.S. bureaucrats will expect Walmart to apply for a federal banking charter if it follows through with producing the patent invention.

What do you think about Walmart possibly creating its own cryptocurrency? Do you think the company will get pushback from bankers and regulators like Facebook did? Let us know what you think about this subject in the comments section below.

Image credits: Shutterstock, Walmart, Wiki Commons, Pixabay, American Banker, and Walmart’s crypto patent discovered by Brian Cohen.

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