Nick Chong · 4 hours ago · 3 min read
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Walmart’s coin could gain approval from regulators easier than Libra, says top investment bank
Walmart’s prospective USD-backed stablecoin should be looked upon more favorably by regulators than Facebook’s Libra, according to U.S. investment banking and financial services company, Cowen, Bloomberg reported.
Where Cowen may not be known as one of Wall Street’s household names, the investment bank has in recent years appeared more confident voicing its bets after being hailed as the first in the US to invest in cannabis, as an early backer of Amazon, and now would give its analysis during the seemingly domino-like spread of plans for corporate stablecoins.
Banking for all?
Jaret Seiberg, a senior policy analyst at New York-headquartered Cowen, announced the company’s position on Walmart’s new stablecoin patent in a note to clients Monday, adding that—should it proceed—the plan could curry favor with Democrats interested in finding a means to serve the unbanked.
As reported previously by CryptoSlate, Walmart has pitched the coin as an “alternative way to handle wealth at an institution that can supply the majority of [low-income households’] day-to-day financial and product needs”—with the retail giant claiming to have more than 275 million customers walk through its doors each week, it may have serious clout in delivering on such a mission statement.
Walmart has been light on details about exactly how its coin could be used, but according to Seiberg, it would probably not be so unlike a rechargeable gift card whereby customers redeem cash for digital currency, spendable instore.
Why would Walmart’s plan ruffle fewer feathers than Libra?
Should Walmart put the plan in front of regulators for approval, the company may for several key reasons face fewer hurdles than Facebook’s embattled Libra project.
For one, U.S. policymakers have expressed great concern that Libra’s multi-asset-backed approach to collateral could jeopardize the power of the U.S. dollar, where Walmart is less likely to draw scrutiny in its plan to back the coin solely with the greenback.
Further, with clear and discernable competition from e-commerce giants such as Amazon—who may also be quietly building a cryptocurrency of its own—Walmart would not pose the same level of threat of monopolization as Facebook.
Seiger noted that Walmart’s plan could have some hiccups of its own, however, stating that the coin could jeopardize business for small banks and credit unions, and subsequently be challenged by Congress.