Amazon, Walmart, JPMorgan explore stablecoins as GENIUS advances

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It’s yet again another big week for stablecoins. On June 17, the United States Senate passed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) by a 68–30 vote.

The GENIUS Act is a proposed bill that, if passed, will establish America’s first federal framework for stablecoins. A few of its key provisions: all stablecoins must be backed 1:1 by cash or short-term Treasuries, issuers must disclose reserves and undergo audits, and there will be a licensing regime for both large and small stablecoin issuers. The bill also makes it difficult for Big Tech companies to issue a stablecoin without unanimous approval from the Treasury, Fed, and the Federal Deposit Insurance Corporation (FDIC). The proposed bill also outlines anti-money laundering (AML) and consumer protection requirements. In totality, the GENIUS Act is the government’s attempt to regulate stablecoins for the first time.

The next step is for the bill to head to the House, where it’s expected to pass without resistance. After that, it will land on President Donald Trump’s desk, and based on his own social media post, he seems eager to sign it.

But even though the bill has a few stops left on its journey before becoming law, companies are wasting no time getting their stablecoin initiatives in motion.

Amazon, Walmart, and JPMorgan position themselves for a stablecoin future

Even before the GENIUS Act advanced this far, banks and financial institutions began laying the groundwork for stablecoin products, betting on the legislation’s eventual passage. Now, we’re starting to see retail giants like Amazon (NASDAQ: AMZN) and Walmart (NASDAQ: WMT) inch into the stablecoin world as well.

Recently, rumors surfaced that Amazon and Walmart are exploring the idea of internal-use stablecoins. Shortly afterward, JPMorgan (NASDAQ: JPM) filed a trademark for a blockchain-based product called JPMD, which many speculate stands for “JPMorgan Dollar,” and believe will be a stablecoin, even though JPMorgan’s filing did not explicitly use the word “stablecoin.”

These corporates saw the early movers in crypto, especially those who launched stablecoins like Circle, generate a significant amount of revenue from their stablecoin offering, so they are now positioning themselves to do the same. With the GENIUS Act on track to pass, their plans to do this have accelerated.

The commercial use-case for stablecoins

At the moment, Amazon and Walmart’s stablecoin plans seem to be focused on internal use; they are closed-loop tokens used within their walled gardens and suppliers’ networks. This isn’t exactly a new concept; it resembles what Circle, the issuer of USDC, has already started doing through its Circle Payment Network.

That revenue doesn’t just come from cost savings either. Stablecoin issuers, under the GENIUS Act, must back tokens 1:1 with cash or equivalents. The issuers typically opt for short-term Treasuries (T-bills) as their cash equivalents, which means the issuers earn the yield on those T-bills, which is around 4% in today’s economic environment. If you’re managing billions in reserves, that passive yield being raked in from stablecoins becomes significant.

The biggest obstacle for corporate stablecoins

But these newfound commercial stablecoin strategies don’t come without obstacles. For an internal stablecoin to work, the people and companies you do business with also need to be part of your stablecoin network.

Let’s say Amazon starts paying vendors using its stablecoin. Vendors will benefit from faster transaction settlement, but they will want a way to convert those tokens into fiat that can be redirected to their other business operations. If every major company starts issuing its own proprietary stablecoin, we’ll end up with a fragmented ecosystem where every issuer will need to devise a way for their network partners to exchange their stablecoins for cash. It’s unclear whether retailers will build their offramps or take advantage of existing, highly liquid infrastructure like Circle’s payment network. But any supplier, vendor, or partner doing business in stablecoins will want a fast and frictionless way to convert their stablecoins to cash.

Could stablecoins replace global payments

We are in an era where, each day, stablecoins are becoming more embedded into the fabric of the global financial system. In today’s high-interest environment, where rates are significantly higher than they were five years ago during the zero-interest rate policy era, every company is under pressure to cut costs and improve operational efficiency. Stablecoins are emerging as a solution for this when it comes to payments and settlements.

But it is not all smooth sailing for stablecoin issuers. Stablecoins only work at scale if the entities a company transacts with also accept them and, even more importantly, have a way to exit those positions. Companies are beginning to roll out stablecoins and launch payment networks, but so far, we’ve heard much more about announcements than the outcomes of these systems. Who’s actually settling transactions in stablecoins? What’s the user experience like? We don’t really have answers to those questions at this point in time.

There will be even bigger hurdles if companies want to make their stablecoins consumer-facing. At that point, they have to convince everyday users to go out of their way to obtain a stablecoin and then use it instead of just pulling out a credit card or paying with cash. That adds a layer of friction to the payment process that might not be worth the hassle for most consumers.

There isn’t enough real-world data to conclude how all of this will play out. But in theory, stablecoins could become a central part of, or even a replacement for, a major piece of the traditional financial infrastructure: domestic and international payments.

However, one thing is certain: As legislation like the GENIUS Act advances and rumors about household-name corporations experimenting with stablecoins spread, incumbents like Circle reap the rewards. On June 17, after news broke that the GENIUS Act had cleared the Senate, shares of CRCL jumped from $149.15 to $199.59, a 38% spike powered by one strong headline about stablecoins.

Watch: Breaking down solutions to blockchain regulation hurdles