A new patent filed by retail giant Walmart has indicated that it has plans to launch its own dollar-backed digital currency, in line with Facebook’s Libra. According to a filing published by the U.S. Patent and Trademark Office, Walmart applied for a patent about using a digital coin tied to a traditional fiat currency, which in other words is also termed as a stablecoin.
Walmart has stated that, “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.” Even though the patent application was filed, Walmart does not seem close to launching a cryptocurrency anytime soon. The move is being viewed by many as a step taken by Walmart to counter Amazon in the retail market.
Being the largest company in the world with a $500 billion annual revenue and employing over 2.2 million people, this is being considered as a significant move from Walmart. The company can use its own cryptocurrency to collect customer purchase history to improve inventory forecasts and predict consumer behaviour in order to increase revenue. At the same time, the move can raise doubts about the sanctity of personal data in the hands of a multinational company. Walmart is already using blockchain technology for tracking produce along its supply chain.
Walmart also plans to develop a service ecosystem based on its cryptocurrency and foresees the creation of an “open-platform value exchange for purchases and for crowdsource work.” The patent also indicates various other developments using the cryptocurrency including freelancer platform, emergency loans, merchandise futures and multi-tender integration. In addition, Walmart stated that “digital currency value could, in some embodiments, be tied to other digital currencies.”
A recent survey indicated that 23 percent of all grocery transactions are done through credit cards. This will allow Walmart to save an amount of $2.3 billion a year through its own digital currency, adding a significant amount to its annual figures.
As Walmart and Amazon are looked in a hard-fought battle over the retail market, a new cryptocurrency can shift the balance. After buying Jet.com Inc in 2016, Walmart also purchased Flipkart which was Amazon’s largest rival in e-commerce in India. Amazon on the other hand purchased Whole Foods Market in 2017 and opened “Amazon Go” convenience stores in 2018. Amazon has also won two blockchain-related patents last year which have provided it with an edge.
It seems to be certain that the near future will see Amazon and the other giant multinationals making their moves in the field of cryptocurrency.
