• Stablecoins could save merchants billions in fees and offer quicker payment processing.

• Decisions hinge on the Genius Act’s regulatory framework for stablecoins, currently debated in Congress.

Some of the biggest merchants are exploring how to issue or use stablecoins, potentially shifting the high volumes of cash and card transactions that they handle outside the traditional financial system and saving them billions of dollars in fees.

Walmart, Amazon.com and other multinational giants have recently explored whether to issue their own stablecoins in the U.S., according to people familiar with the matter.

Expedia Group and other large companies such as airlines have also discussed potential efforts to issue stablecoins, some of the people said.

A move to launch a payments system by Walmart or Amazon that bypasses the traditional payments system would send shivers through the nation’s banks.

With vast networks of customers and employees, troves of data and far lighter regulations, retail and technology companies have long been viewed as particular threats to banks, including regional and community lenders. 

Stablecoins are currently used to store cash or purchase other cryptocurrency tokens. They are supposed to maintain a one-to-one exchange ratio with dollars or other government currencies, and are backed by reserves of cash or cash-like assets such as Treasurys.

The retailers’ final decisions would depend on a bill, called the Genius Act, which would begin to establish a regulatory framework for stablecoins. The bill recently passed another procedural hurdle but still needs to clear the Senate and House.

Why the retailers are interested

Stablecoins could allow merchants to circumvent traditional payment rails, which cost them billions of dollars in fees each year, including the interchange fee they pay when customers make purchases using their cards.

Payments can take days to settle, delaying the time it takes for merchants to receive the proceeds from sales. Stablecoins offer the possibility for a quicker process. They could be of particular interest to merchants with suppliers who are located abroad.

Merchants have long tried to launch payment alternatives to get around the card-based system that is dominated by Visa and Mastercard, though most of those have failed to gain traction.

Amazon’s efforts are still in the early stages, a person familiar with discussions said, and some of the talks have centered on having the company’s own coin for online purchases. 

The companies have also weighed how to use outside stablecoins, some of the people said, even if they decide not to pursue their own. That could be through a consortium of merchants led by one stablecoin issuer, for example.

Megabanks have been considering a stablecoin consortium of their own, The Wall Street Journal has reported.

Merchant trade groups have been meeting with lawmakers in recent months to push for passage of the Genius Act. The trade groups, led by the Merchants Payments Coalition, have said that a regulatory framework for stablecoin would enable an alternative payment type for merchants that could significantly lower their expenses and create competition against Visa and Mastercard. 

There is still some skepticism about the security of stablecoins and the regulatory implications of getting involved with digital assets.

Walmart has lobbied for adding a separate amendment that would introduce more competition in the credit-card sector to the Genius legislation, according to people familiar with the matter.

Walmart has long sought to get into financial services, where it could leverage its network of millions of weekly customers and employees. It has in recent years waded deeper into the industry through its fintech unit.

In the 2000s, the retailer withdrew an application for an industrial loan company charter after broad opposition.