The retail giant Walmart has applied for a patent with the U.S. Patent and Trademark Office about a cryptocurrency that bears a lot of resemblance with stablecoins, already prevailing. But amid other stablecoins, its most important link is establishing with the social media giant Facebook’s Libra.
Similar to Facebook’s Libra, the coin launched by Walmart will not be a ‘pure’ cryptocurrency which has no link with the fiat world. It is going to have a peg with the regular currency of the financial world.
Now, the Libra vs Walmart Coin scenario might just turn out to be a healthy competition or it might excite other corporations to roll out their own stablecoins, thus increasing the multipolarity and gaining a lot of healthy market share of the traditional crypto world such as bitcoin.
The filing made by Walmart states:
In this disclosure, a blockchain protected digital currency may be provided. The digital currency may be pegged to the US dollar and available for use only at selected retailors 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.
The stablecoin being patented by Walmart aims at the poor and low-income houses for handling their financial needs. There is a huge chunk of the worldwide population which is unbanked right now. Walmart’s aim of providing internet-based financial service to this community lies in parallel with the same goal set by Facebook’s Libra, which already has over 2.7 billion user base worldwide.
Since internet has reached virtually every portion of the world, a whole new marketplace will be opened by such currencies.
As the patent states:
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.
One of the prominent feature that make Walmart’s proposed coin stand apart from others is the aspect of earning interest on the account. With this aspect of earning a bit back as a result of using the network might propel the users to prefer Walmart’s blockchain ecosystem over others.
A reward system may also provide extra incentive for users to join Walmart digital currency world as the patent states, “In some embodiment, a reward program may be created. In the reward program, for each unit of digital currency a person spends or earns, the person receives rewards toward other purchases.”
An important feature mentioned in the patent is the elimination of the need for carrying credit or debit cards. By providing a blockchain-protected digital currency and introducing biometric verification such as fingerprint or eye/retina scan, Walmart aims to make a person a credit card to their own digital value bank. Innovation is taking place in the crypto world at a very fast pace as more projects are springing up.
Bitcoin controls majority of the crypto world due to its huge market share as it has been the leading cryptocurrency of the past decade. With the emergence of cryptos like Libra, multipolarity is not only expected to increase in the crypto world only, as the global currency competition will also get affected.
Although the launch of centralized cryptocurrencies is good for the broader blockchain world, the core concept proposed by “pure” cryptocurrencies will get undermined as stablecoins take up their market share. Stablecoins maintain the peg with regular fiat and thus inherit all its shortcomings, including inflation.
With regulators stepping into the illegal-activity-filled blockchain and crypto space, adoption on the corporate and institutional side is expected to increase in the future. Companies like Facebook and Walmart adopting blockchain is just a signal to this happening. It will be interesting to see how much potential this space is able to gather as more global attention and money flows into to space, steering it forward.