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Cowen Inc., an American multinational independent investment bank and financial services firm, has recently asserted that the retail giant Walmart’s efforts to find a way of launching and utilizing its own digital coin may generate less political friction compared to Facebook’s Libra.
Cowen added that Walmart’s cryptocurrency might attract individuals who do not wish to conduct business with conventional banks.
Facebook Inc’s Libra has already been suffering various political obstacles in the U.S. Several members of Congress including Congresswoman Maxine Waters (D-CA), the Chairwoman of the House Financial Services Committee, wrote a letter to Facebook CEO Mark Zuckerberg, telling him to stop the development of the Libra crypto project. Senior analyst at Cowen said that Walmart’s virtual coin may face less opposition than that of Facebook’s Libra.
Jaret Seiberg, a senior policy analyst at Cowen, wrote in a note to clients that unlike Facebook Libra, which is pegged to various financial assets, Walmart’s digital currency will be pegged to the USD. While both are stablecoins, Seiberg believes that being pegged to the dollar will give the cryptocurrency more stability. According to him, Walmart’s coin will serve different global intentions than those of Facebook’s Libra.
Earlier this year in January, Walmart has applied for a patent for creating a digital coin that runs and records transactions on a blockchain to facilitate cheaper and faster transactions along with other features. Regarding the application of this patent, Kory Lundberg, a spokesman for Walmart said that the firm has no plans to utilize the patent on an immediate basis. However, Walmart has already been using blockchain technology in its supplier network to track goods and along with its supply chain. It indicates that Walmart has been at the forefront when it comes to adopting blockchain technology and crypto.
A Cryptocurrency Similar to Rechargeable Gift Cards
According to Jaret Seiberg, Walmart’s virtual coin would be much similar to any rechargeable gift card. Users will be able to recharge it with cash by simply visiting nearest Walmart store. The consumer can exchange the cash for a similar amount of Walmart’s virtual coin that they could then spend at any Walmart store.
He further explained that Walmart’s digital coin could become a potential threat to small banks and private lenders. Like Facebook’s Libra, Walmart’s cryptocurrency may start a series of congressional hearings and Walmart’s move would create a lot of disapproval when considering the “given overall doubts on Capitol Hill about digital coins.”
Concluding the matter, the analyst believes that lawmakers wouldn’t create much trouble for Walmart’s digital coin as several Congress members did for Facebook’s Libra.