Jaret Seiberg, a senior policy analyst at one of the leading investment banking corporations, Cowen, has revealed in an interview to Bloomberg that Walmart’s cryptocurrency might not face the type of backlash that Libra received from US regulators.
Walmart had earlier announced that the company had applied for a cryptocurrency patent in an application filed with the United States Patent and Trademark Office. The retailer has shown plans to implement a blockchain-based payment system. The patent application was filed on 1st August and was titled System and Method for Digital Currency via Blockchain. The application explains working of the product under development. The application says:
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 currency would be designed to provide a free-free or free-minimal place to store wealth for shoppers to shop on Walmart. Walmart already plays a big part in money services in the United States as the company operates a considerable part of the financial services of the MoneyGram network. The company also offers services like PayPal through numerous ATMs all across their network of stores.
Many people have started comparing it to Facebook’s Libra cryptocurrency. However, crypto enthusiasts have been pointing out the hypocrisy of the government and the financial institutions, quoting a post by Brian Cohen as an example where he points out that Walmart’s plan has not received even the slightest of criticism from anyone.
WTF – Facebook announces Libra cryptocurrency and all hell breaks loose. Walmart releases cryptocurrency and no one cares ??? 🙃 "All or part of a paycheck can go into a Walmart currency" https://t.co/6A1kvI9PV3 pic.twitter.com/10ODa4Sxuq
— Brian Cohen (@inthepixels) August 2, 2019
In an August 5 report in Bloomberg, Seiberg explained that both the currencies are different due to the fact that they are targeting two different types of demographics. Libra is intended for disruption on a local level while Walmart is planning to use the system as a retailer only system. He said that the only advantage that Walmart has with its currency is that it can be a game-changer for some demographic legislature where there are people who do not use banks for regular transactions.
However, he pointed out that the currency may face regulatory hang-ups and might not get automatic approval from the Congress as many people are expecting it to get. He said that the Congress can label the coin as a threat to smaller banks and credit unions thus not giving it preliminary approval. However, he believes that the Congress will give it approval in the longer run.
He also revealed some plans for the cryptocurrency, saying that it will not be a cryptocurrency to its full extent. It will be pegged to the United States dollar and will act as a rechargeable gift card. He said that Walmart plans to use the token just like a gift card as consumers will give cash to Walmart to get Walmart Coin in their digital wallets. The project is planned to launch in a few years and is still under development and the final details are expected to hit the internet by the end of this year.