Walmart goes back to the blockchain with new stablecoin patent

JP Morgan has an internal stablecoin, Facebook has the Libra, a proposed global stablecoin, and now Walmart has applied to patent the use of a digital coin, backed by fiat currency and linked to customer spending history.

Similar to Bitcoin and Libra

The filing was published earlier this month by the U.S. Patent and Trademark Office. The filing is for a blockchain based digital payment system that has some similarities to the Libra project. According to the patent, Walmart proposes to create a coin that runs on a digital ledger, or blockchain. The coin will be linked to fiat currency and government bonds to ensure a stable value. The blockchain will have a layer that records the transaction history and account information of Walmart’s retail customers.

There are several reasons that Walmart may wish to explore a blockchain-based token. It would give the company a means to provide its customers with faster, cheaper payments, and it could reward them with loyalty points that could be paid in the company’s native currency. It would effectively create an internal Walmart economy.

However, the filing appears to be intended for a future project, that may yet be years away. Given the political backlash from global regulators towards Facebook’s proposed Libra stablecoin, there may be little appetite for Walmart to proceed until the regulatory framework is clearer.

Helping low-income earners

One of the original intentions of Bitcoin was to provide access to a new financial system for those who currently have limited access to traditional financial services. A similar theme (bank the unbanked) was part of the Libra pitch. Now Walmart has picked up on the same messaging and in the patent application, it states, “Using a digital currency, low-income households that find banking expensive, may have an alternative way to handle wealth at an institution that can supply the majority of their day-to-day financial and product needs.”

One area where Walmart takes the opposite approach to Facebook is with the ability to earn interest on savings and transactions. Somewhat controversially, the Libra Foundation has proposed that interest earned on the project’s reserve fund would be paid back to the Libra association members who would each pay $10 million to participate. The Walmart patent submission is light on details but does include the possibility that its customers could “even earn interest.”

This is not Walmart’s first foray into blockchain. The company is a blockchain pioneer. In 2016, Walmart and the Chinese technology institution the Tsinghua University began conducting blockchain based supply-chain trials with IBM enterprise-grade blockchain solution using the Hyperledger blockchain. The company has also previously applied for other blockchain-related patents including delivery drones, power payments, and package tracking.