Facebook, move over. Walmart is here.
The Arkansas retailing giant has filed an application with the United States Patent Office for a digital currency backed by regular currency, such as the US dollar. This is similar in concept to a stablecoin, which aims to maintain stability in a volatile crypto ecosystem by pegging its value to a fiat currency or a basket of goods.
Walmart’s move follows Facebook’s announcement of Libra, a cryptocurrency and blockchain that brings together an assortment of global companies, venture funds, and nonprofits to provide banking services to the underbanked and unbanked population of the world. Walmart has not disclosed similar global ambitions in its patent filing. But the application does state that the uses of the digital currency are aimed at low-income households to “supply the majority of their day-to-day financial and product needs.”
Unlike Facebook, Walmart Has Details About Its Crypto
The July 16th Senate and Congressional hearings made clear that Facebook has yet to flesh out details related to its cryptocurrency’s uses. In contrast, Walmart’s patent application makes clear the digital currency’s varied applications. The most obvious one relates to its use as a unit for purchase. “The digital currency can provide a fee-free or fee-minimal place to store wealth that can be spent at retailers or converted to cash,” the application states.
Customer purchase history will accrue savings programmed into the currency. Presumably, the more purchases a customer makes of a certain item, the more savings they will generate with respect to that item in the future. The application states that the digital currency could also be used for rewards program and gift cards.
Both will ensure price guarantees for certain products, even if their prices go up, over a period of time. Another use of the currency outlined in the application is as a medium to issue short-term emergency loans at low interest rates. Yet another one is for the digital currency to be used as a biometric credit card. Walmart intends to record all transactions associated with the digital currency on a blockchain. It is likely that the blockchain will be a private one, given the digital currency’s uses. Facebook has said that it intends to make its Libra blockchain public and completely decentralized in approximately five years.