On the 1st of August 2019, Walmart (the world’s largest company with the most revenue and employees) has filed a patent application for its own digital currency.
This move follows the Facebook cryptocurrency initiative in the form of Libra. The ‘Walmart Coin’ specifications are similar to what Facebook has proposed for its Libra.
Walmart’s cryptocurrency may have demographic appeal to legislators involved in the efforts of devising an alternative financial structure for people who are not regular users of banks or find banking costly. This new digital currency may not face the same regulatory trouble as Facebook’s Libra as there is a difference of scale between the two. Walmart’s cryptocurrency and Libra are different from others like Bitcoin in a very important manner; they are backed by a central authority and household names.
Walmart’s digital currency is proposed to be a fiat-backed stable coin. It is also said that it may be pegged to the US dollar and available for use only at select retailers or partners. It seeks to make transactions cheaper and faster. It could be tied to some other digital currencies and may be purchased using cryptocurrencies like Bitcoin rather than fiat currency alone. It aims at providing a free or cheap way to store wealth that can be converted back to cash as and when the need arises. It could earn interest, be used for food payments and may replace debit or credit cards without cash. Savings may be offered to customers on purchases. It seeks to use artificial intelligence to help the customer purchase according to his budget and preferences.
Walmart is trying to improve its inventory forecasts and predict consumer behavior by using the cryptocurrency to collect purchaser data with the ultimate aim of increasing its profitability. Its own tokens will also reduce the credit card processing fees, saving it billions of dollars each year.
There are ambitious plans for this new digital currency including the provision of a freelancer platform, short-term emergency loans, digital currency futures, and multi-tender integration.
Walmart is not new to the blockchain technology and at present, this technology covers its supply chain management and digital offerings for customers.
Walmart’s cryptocurrency does involve a major privacy concern especially if it is used alongside the various other services provided by the Walmart ‘Money Centers’.
It seems imminent that large corporations will foray into the area of cryptocurrency in the form of their own branded stable coins in an effort to exterminate banks from their financial ecosystem. Walmart has made a futuristic move. Whether this move proves to be beneficial is yet to be seen.