Considered a core holding that would never fall, Visa (V) and Mastercard (MA) did just that. A report that two retail giants – Amazon (AMZN) and Walmart (WMT) – would bypass the credit card firms sent MA and V stock down by 4.62% and 4.99%, respectively.
The two retailers might consider a stablecoin payment system that bypasses credit cards. This would save Walmart and Amazon from paying their significantly high fees. Shift4 Payments (FOUR), Block (XYZ), Paysafe (PSFE), and PayPal Holdings (PYPL) shares also fell on June 13.
Unjustified Fears
Retailers may add unnecessary risks by using stablecoins. They may open themselves up to hacking and cybersecurity risks. Conversely, Visa and Mastercard have an established network, strong security, and a dedicated customer support team. Stablecoin may not have the maturity to handle everyday grocery shopping at Walmart.
Customers would not benefit from a stablecoins-based system. Retailers would not pass the savings to their customers. As retailers boost profits, customers may avoid the new transaction options, citing safety concerns.
The UST collapse in May 2022 offers lessons about the use of algorithmic stablecoins. Companies would need to study the timeline. The pros and cons of using them over credit cards might cause the firms to consider dismissing stablecoin use.
