Walmart may be following in Facebook’s footsteps by developing its own cryptocurrency, according to a recent patent filing.
Facebook has certainly garnered its fair share of headlines in the cryptocurrency ecosystem over the last few months. The ongoing development of the Libra, along with the strong reaction from the U.S. Congress, has sparked many an online discussion.
Now it appears another giant is entering the crypto marketplace as Walmart has filed its own patent for what appears to be a stablecoin.
Another 800-Pound Gorilla
On August 1st, Walmart filed a patent (number 20190236564) called “System and Method for Digital Currency via Blockchain.” This patent is for a method for:
…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…
There are some interesting features of this new cryptocurrency to be found within the patent filing. One such item is that the crypto can be spent or redeemed for cash at Walmart or with participating partners. The retail giant is also aiming to keep fees associated with the crypto low or even at zero, and the patent filing even suggests users’ crypto accounts could be interest-bearing.
The Walmart crypto could be tied to the U.S. dollar, or it may even be tied to other cryptocurrencies. The filing also notes that this crypto would benefit those who lack access to traditional financial systems, such as credit and debit cards, as the crypto account may act as pre-approved biometric credit.
Some Possible Benefits
Walmart creating its own cryptocurrency does offer the retail giant some advantages. First, the crypto can be used for products and services, such as hiring a repair technician for a couple of hours. This ties service providers to Walmart, who will likely gain an honorarium for its effort.
A major benefit for Walmart would be savings on credit and debit card transactions. People are increasingly using plastic to buy items instead of cash, but each purchase costs the retailer a percentage charged by the card’s bank.
Most retailers don’t take American Express as that company can charge up to 3% while Visa and MasterCard normally charge 2%. While not large when looking at a single transaction, Walmart did $500 billion in revenue in 2018. If every person who used a credit or debit card switched to the new crypto, Walmart would save up to $10 billion per year in charges.
Of course, it remains to be seen if the new crypto will see the light of day. Congress has not taken a shine to Facebook’s Libra, so chances are Walmart’s new crypto will be met with the same lack of enthusiasm. However, Walmart does have huge financial and political clout behind their brand.
Images courtesy of Flickr/Mike Mozart, Pixabay, and Pxhere.
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