The Dangers of Amazon and Walmart Issuing Stablecoins
Sen. Elizabeth Warren (D-MA) and leading consumer advocacy groups have raised concerns over reports that Amazon and Walmart are considering issuing their own stablecoins. This development has been framed as a potential consequence of pending stablecoin legislation in the Senate.
Warren’s Criticism
Warren highlighted a loophole in the GENIUS Act that would allow Big Tech companies and major retailers to create their own private currencies in the form of stablecoins. She warned that this could lead to billionaires like Elon Musk, Jeff Bezos, and Mark Zuckerberg launching stablecoins that track consumer purchases, exploit their data, and eliminate competition.
Industry Response
The GENIUS Act, which is close to passing in the Senate, would establish a legal framework for issuing stablecoins in the United States. This has sparked interest from various sectors, including tech firms and merchants, who see stablecoins as a way to gather financial data, avoid payment processing fees, and earn passive income on customer deposits.
Opposition and Concerns
Consumer advocacy groups like the Consumer Federation of America have expressed concerns about the risks of allowing tech companies to issue private currencies. They fear that this could concentrate immense power in the hands of a few corporations, posing threats to financial stability and consumer protection.
Amanda Fischer, policy director at Better Markets, highlighted the potential impact on independent businesses, who may face obstacles competing with tech giants running unregulated banking operations.
Legislative Outlook
The GENIUS Act is expected to pass in the Senate, despite recent opposition from some lawmakers. If approved, it would need to clear the House before reaching President Donald Trump’s desk for signature.
Industry Shift
The growing interest of traditional companies like Amazon and Walmart in stablecoins reflects a broader trend towards blockchain-based financial infrastructure. This signifies a shift in how industries view digital assets, moving beyond speculation towards foundational infrastructure.
Republican Dissent
While Republicans have been supportive of the bill, Sen. Josh Hawley (R-MO) recently voiced opposition, citing concerns about the lack of controls for tech companies issuing stablecoins.
As stablecoin legislation progresses, the debate over the role of tech companies in issuing private currencies continues to unfold, with implications for financial markets and consumer protection.
Edited by Andrew Hayward