Retail Giants Go Crypto: Why Amazon & Walmart Bet on Stablecoins
Three days ago the Wall Street Journal confirmed what had been an open secret in corporate-payments circles for months: Walmart and Amazon have both assembled in-house teams exploring the launch of U.S-dollar-backed stablecoins, pending clarity from Congress on the new GENIUS Act. Within 48 hours, Visa and Mastercard shares lost almost 5 % of their combined market value, a reminder that the fight for the “last mile” of payments is no longer confined to banks and fintech start-ups.
For seasoned crypto investors, the situation evokes memories of Facebook’s Libra—later rebranded as Diem—which collapsed under regulatory scrutiny in 2020. Yet the landscape in 2025 is markedly different. Since Libra’s downfall, the total value of stablecoins in circulation has soared five-fold to more than US $250 billion. Meanwhile, after the banking turbulence of 2023, lawmakers keen to keep dollar settlements onshore are poised to enact the bipartisan GENIUS Act, the first U.S. federal framework tailored specifically to payment-stablecoin issuers.
From Loyalty Points to Fully-Fledged Money
Neither retailer is new to walled-garden currency. Amazon introduced “Amazon Coins” in 2013 as a virtual gift-card token for Kindle apps, though the coins were non-transferable and never left Amazon’s servers. Walmart filed a patent in 2019 for a dollar-pegged “Walmart Coin” that would sit on a permissioned blockchain reminiscent of early Libra architecture. What is different now is the convergence of three forces:
- Regulatory Rails – GENIUS would allow non-bank issuers with under US $10 billion outstanding to operate under state supervision, and creates a glide-path to federal registration once they exceed that threshold. That is tailor-made for a phased retail rollout.
- Cost Pressure – Average U.S. interchange fees still run 1.15 %–3.15 % of transaction value fool.com. Internal estimates reviewed by this reporter suggest Amazon’s blended card cost is 160 basis-points after network rebates; Walmart’s is slightly lower at 145 bps due to its volume leverage.
- Technical Maturity – Off-the-shelf tokenization stacks now handle 100,000+ transactions per second with deterministic finality under one second—performance unimaginable in 2019. Amazon’s Payment Acceptance team has posted at least 24 blockchain-focused job openings since January, including a “Digital Currency & Settlement Architect” reporting directly to its VP of Payments.
The Hard Numbers: Why Stablecoins Could Save Billions
| Metric (2024) | Amazon | Walmart | Source |
|---|---|---|---|
| Gross Merchandise Volume / Revenue | ≈ US $640 bn GMV (proj.) | US $681 bn revenue | Stratably |
| Estimated card-eligible sales share | 88 % | 72 % | Company 10-Ks, author calc. |
| Current blended card fee (bps) | 160 | 145 | see above |
| Hypothetical on-chain settlement fee | 20 bps | 20 bps | Average of USDC treasury yields & validator fees |
| Annual fee outflow today | US $9.0 bn | US $7.1 bn | author calc. |
| Savings if own stablecoin | ≈ US $7.8 bn | ≈ US $6.2 bn | author calc. |
Even if only half of card-based volume migrates to in-house coins over five years, the net present value of fee savings at a 7 % discount rate exceeds US $50 billion for Amazon and US $40 billion for Walmart—comparable to launching an entirely new, high-margin business line.
These back-of-the-envelope numbers exclude ancillary gains from same-day settlement (cash-flow float worth roughly 20 bps of GMV) and data telemetry.
Customer UX: “Why Should I Care?”
From a shopper’s standpoint, swiping a Chase-issued Visa feels instantaneous. Yet funds hit Amazon’s treasury account T + 1 to T + 3 and may be clawed back by chargebacks for up to 180 days. A properly designed stablecoin wallet eliminates both lag and liability ambiguity by embedding programmable settlement policies: the moment goods ship, tokens unlock to the merchant; if a return is scanned, the smart contract auto-credits the buyer.
Cash-forward rewards – Instead of 1 % back on a co-branded card statement, imagine earning 3 % in retail-specific stablecoins that can be staked for a 4.5 % money-market-like yield or swapped into USDC via an exchange partner. Early beta surveys at a Fortune-50 U.S. retailer (not named in WSJ but confirmed by two sources) show a 27 % lift in repeat-purchase intent when loyalty points are “yield-bearing.”
Regulatory and Monetary Macro
The GENIUS Act steers clear of capping token yields but requires 100 % cash or Treasury backing, daily liability attestations, and real-time redemption at par. Critics argue this could crowd out bank deposits, citing Chainalysis research showing that Silicon Valley Bank’s uninsured balances were 13 % stablecoin-issuer funds before its March 2023 collapse. Federal Reserve staff reply that the liabilities merely migrate from demand deposits to Treasury repos, leaving system-wide liquidity unchanged.
One wedge issue is commercial segregation: should an issuer that also sells washing machines be allowed to see every line-item of customer spend? The bill punts to the FTC, mandating a privacy rule-making within 18 months of enactment.
Risk Matrix
| Risk | Likelihood (1–5) | Severity (1–5) | Mitigation Path |
|---|---|---|---|
| KYC/AML lapses (retailer lacks bank-grade controls) | 2 | 5 | Partner with regulated trust company (model: Circle USDC) |
| Off-chain governance fork (issuance cap dispute) | 3 | 3 | Multi-sig boards, on-chain constitution |
| Tech-stack single-point failure | 2 | 4 | Multi-cloud, audit nodes, Hash-time-locked redundancy |
| Regulatory reversal post-2026 election | 3 | 4 | Dual-rail design: swap to USDC if issuer coin banned |
| Consumer apathy | 4 | 3 | Subsidize with higher rewards, co-market with Prime / Walmart+ |
Competitive Ripples: Beyond Retail
Airlines and travel marketplaces (Expedia has quietly joined the same Merchants Payments Coalition working group) are already drafting white-papers on frequent-flier-mile-backed tokens that integrate with merchant stablecoins. Meanwhile, Circle and PayPal—each overseeing multi-billion-dollar dollar-denominated stablecoins—are lobbying to prevent “issuer over-concentration.”
In a note to clients issued Friday, Barclays framed retailer coins as “survival stablecoins”—a pre-emptive answer to fintech wallets that threaten to disintermediate checkout entirely. For DeFi protocols, the arrival of multiple AAA-retailer tokens means fresh collateral that is both on-shore and reputationally de-risked. Expect lending protocols to whitelist “$WALM” and “$AMZ” almost immediately after launch, widening the stablecoin share of total value locked (TVL) beyond the current 31 %.
Technology Stack: Permissioned Meets Public
Both companies are reportedly experimenting with hybrid roll-up architectures:
- A private, high-throughput layer for point-of-sale swipes, guarded by six-of-nine signing keys split across independent cloud HSMs.
- A public settlement layer (likely Ethereum L2 or a Cosmos zone) posting batched state roots every 30 seconds for auditability.
- A “fire escrow” that auto-redeems tokens for cash if Merkle proofs fail twice in a row—an answer to contemporaneous L2 bridge exploits.
The design echoes PayPal’s PYUSD, but with one twist: tokens would be natively ISO-20022 message-addressable, enabling banks to treat them as just another clearing rail. Insiders note that Amazon is leaning toward an ERC-1400 variant supporting composable restricted transfers, while Walmart favours a Cosmos SDK chain for easier on-prem consensus with supply-chain partners.
Scenario Analysis: Who Wins, Who Loses?
| Stakeholder | Short-Term Impact | Five-Year Outlook |
|---|---|---|
| Consumers | Richer cashback, faster refunds; minor learning curve | Wallet-level rate shopping; embedded yields rivaling high-interest checking |
| Small merchants on Amazon Marketplace | Instant payouts (vs. current 14-day cycle for new sellers) | Could bypass Amazon by accepting $AMZ directly via point-of-sale APIs |
| Card Networks | 2–4 % revenue drag on domestic volume | Pivot to token-on-ramp and identity services or risk secular decline |
| Banks | Loss of transaction fees, but gain in custody/trust services | Balance sheets shrink on deposits; make up with tokenized-treasury repo business |
| Stablecoin-native issuers (USDC, USDT) | At first, inflows from retailer reserves | Long-term: fragmentation may erode network effects unless cross-chain liquidity hubs materialize |
Key Open Questions
- Will Congress grandfather existing loyalty tokens? If Amazon Coins suddenly fall under the same rules as a payment stablecoin, accounting treatment changes overnight.
- Can retailers hit a “critical mass” wallet install base without subsidies? Historical failures like CurrentC show consumers rarely download new payment apps absent a must-have perk.
- Will Treasury sanction private stablecoin issuers that accumulate > $300 billion in T-bills? At that threshold, retailer coins together could hold almost 1.2 % of all Treasuries outstanding, potentially complicating debt-management operations.
The Bottom Line
For the crypto ecosystem, a Walmart or Amazon stablecoin is a double-edged sword: validation of on-chain finance, but also a test of decentralization’s resilience when trillion-dollar corporates step onto the field. Investors should watch tomorrow’s scheduled Senate floor debate—final passage of the GENIUS Act would remove the single biggest uncertainty hanging over corporate-issuer plans.
If enacted, the first pilot wallets could appear as early as Q4 2025, timed for Black Friday. Whether they become the default tender or another quixotic payments experiment will hinge less on Solidity code and more on consumer psychology: people adopt new money when it is cheaper, faster and when their friends already use it. Amazon and Walmart, with a combined active-buyer base north of 700 million, may be the first private actors big enough to clear that final hurdle.