Walmart and Amazon are looking to create stablecoins, a type of cryptocurrency, people familiar with the company’s plans have said.
Higher-ups at the company are hopeful the high volumes of cash and card transactions will save them billions in fees, according to reporting from The Wall Street Journal. The coins could limit the fees and immediately transfer money to retailers.
Stablecoins are used to store cash or purchase other cryptocurrency tokens. The coins are backed by Treasuries and have a one-to-one exchange ratio with dollars or government currencies.
Still, for the payment method to be implemented, lawmakers would need to pass the Genius Act, a piece of legislation that aims to establish a regulatory framework for stablecoins. The legislation would need to be approved by both the House and Senate.
One trade group has been lobbying members of Congress to push for the legislation’s passage. The regulatory framework for stablecoin, the Merchants Payments Coalition, said in talks it would allow merchants to utilize alternative payment methods that could significantly lower expenses.
The news sent Visa and Mastercard stocks down about six percent on Friday. Visa was the worst performer on the Dow Jones Industrial Average and the S&P 500 close to noon.
Still, it’s not clear if competition between the coin makers and banks would be beneficial. Walmart is lobbying to include an amendment that would introduce more competition in the credit-card sector.
Airlines and other companies like Expedia Group are also working to implement the payment system, sources told the outlet.
It’s not clear how the country’s biggest banks would respond to the move from the two largest retail vendors.
Cryptocurrencies are becoming more popular, with approximately six percent of the population owning one type of digital coin.
A person familiar with the ongoing Amazon discussions said the company’s plans are in the early stages, but there are talks of potentially using outside stablecoins.
In a note this week, TD Cowen analyst Jaret Seiberg said the “push to instant payments is inevitable and represents a risk” to Visa and Mastercard, according to the newspaper.