Retail Giants' Stablecoin Gambit Rocks Payment Networks, Erasing $60 Billion in Market Value
Wall Street Trembles as Walmart and Amazon Plot to Sidestep the Card Networks' Toll Booth
Pyment network giants Visa and Mastercard watched helplessly as investors erased roughly $60 billion from their combined market value. The catalyst: a Wall Street Journal report revealing that retail behemoths Walmart and Amazon are quietly developing proprietary stablecoins – digital tokens pegged to the U.S. dollar – that could allow them to process transactions directly and bypass the lucrative fees charged by traditional payment networks.
Visa shares plummeted 7% to $352.85, while Mastercard tumbled 6% to $562.03 in one of the sector's worst trading sessions this year. American Express fell 4%, and other payment processors including Capital One, PayPal, and Block also suffered significant declines as investors recalibrated their outlook for the payments industry.
Table: Overview of Major Stablecoin Types, Features, and Leading Examples (2025)
| Type | Backing Mechanism | Key Features & Risks | Leading Examples |
|---|---|---|---|
| Fiat-backed | 1:1 by fiat reserves (e.g., USD, EUR) | High stability, issuer & regulatory risk | Tether (USDT), USDC |
| Crypto-backed | Overcollateralized by cryptocurrencies | Decentralized, volatile collateral, requires overcollateralization | DAI |
| Commodity-backed | Pegged to commodities (e.g., gold) | Value tied to commodity, subject to commodity price risk | PAX Gold (PAXG) |
| Algorithmic | Supply controlled by algorithms | No asset backing, high risk of de-pegging, market-dependent | (e.g., TerraUSD) |
The Multibillion-Dollar Fee War Hiding in Plain Sight
Behind this market turbulence lies a longstanding financial tension that most consumers never see: the battle over interchange fees. These charges, typically ranging from 1.5% to 3% per transaction, are paid by merchants every time a customer swipes, taps, or enters their card details online. For retail giants, these fees translate into billions in annual costs that directly impact their bottom line.
"The payment networks have effectively operated as a regulated oligopoly for decades," said one veteran retail industry analyst. "For a company like Walmart, eliminating these fees could potentially save up to $10 billion annually – that's the equivalent of boosting their valuation by over 60%."
This financial incentive explains why major retailers are exploring blockchain-based alternatives that could settle transactions in seconds rather than days, with fees potentially dropping to a fraction of current levels – perhaps as low as 0.1% to 1.5%, according to industry estimates.
Digital Dollars: The Stablecoin Solution
Unlike volatile cryptocurrencies such as Bitcoin, stablecoins are designed to maintain a steady value, typically pegged 1:1 to the U.S. dollar and backed by cash or Treasury securities. This stability makes them potentially viable for everyday transactions.
The technical foundations for this disruption are already in place. Circle's USDC stablecoin processed approximately $1 trillion in on-chain volume in November 2024 alone, demonstrating the throughput capacity needed for retail-scale adoption. By processing payments directly on high-efficiency blockchain networks like Solana or BASE, retailers could dramatically reduce transaction costs while improving settlement speed.
"What we're witnessing is the beginning of a multi-rail future for payments," explained a financial technology consultant familiar with major retailers' digital strategies. "The question isn't whether stablecoins will play a role in retail payments, but how quickly adoption will occur and how the incumbent networks will respond."
The GENIUS Act: Legislative Linchpin
The retailers' ambitious plans hinge on a critical piece of legislation currently advancing through Congress. The GENIUS Act of 2025, which recently cleared a procedural vote in the Senate, would create a regulatory framework allowing non-financial corporations to issue fully-reserved stablecoins.
With over 120 proposed amendments, some unrelated to stablecoins, the bill's passage remains uncertain. Industry observers put the odds at approximately 60%, with final approval potentially coming in the third quarter of 2025. Failure would significantly delay retailer plans, while passage could accelerate pilots as soon as 2026, with mass adoption following in 2027 and beyond.
The Consumer Experience: Speed vs. Rewards
For shoppers, the stablecoin revolution promises both benefits and tradeoffs. Transactions would settle almost instantly instead of taking days to process. Merchants might pass some savings to consumers through lower prices, enhanced loyalty programs, or improved services.
However, consumers have grown accustomed to credit card perks like cashback rewards, fraud protection, and interest-free periods – benefits not inherently available with stablecoin payments. This creates a significant adoption hurdle that could slow the transition.
"Consumers don't particularly care about the payment rails – they care about convenience, security, and rewards," noted a consumer banking expert. "The winning stablecoin solutions will need to replicate these benefits while delivering superior speed and potentially lower costs."
Winners and Losers in the Payment Revolution
The stablecoin shift would create clear winners and losers across the financial ecosystem. Infrastructure providers like Circle and Paxos could see substantial growth as stablecoin issuers. High-throughput blockchain networks including Solana, BASE, and Stellar stand to benefit from increased transaction volume.
Payment orchestration platforms like Adyen and Stripe could thrive in a multi-rail environment by abstracting the underlying technology and helping merchants optimize payment routing. Retailers themselves would see immediate working capital improvements through faster settlement, with interchange savings flowing directly to their bottom line.
The traditional networks aren't standing still, however. Visa has already demonstrated USDC settlement on Solana with Circle, while Mastercard launched its "Crypto Credential" token-mapping system last year. These moves suggest the incumbents are preparing to compete in a blockchain-enabled future rather than ceding ground entirely.
The Investment Landscape: Risk Reset, Not Secular Decline
For investors, today's market reaction requires careful interpretation. The probability-weighted impact on payment networks appears modest based on likely adoption curves. Analysis suggests that even if stablecoins captured 10% of U.S. retail payment volume by 2030 – a plausible though ambitious target – Visa might see approximately 8% EPS decline, roughly in line with today's share price drop.
After the drawdown, Visa trades at approximately 25 times FY2026 earnings estimates, a 10% discount to its five-year average while still projecting high-teens EPS growth. This suggests the market may have appropriately repriced risk without signaling an existential threat to the payment networks' business model.
For those considering investment positions, a measured approach may be prudent. Building positions gradually over multiple tranches could mitigate volatility as legislative developments unfold. Options strategies such as selling 2026-maturity puts while buying limited upside call spreads might offer asymmetric exposure for those with appropriate risk tolerance.
Investors should note that past performance doesn't guarantee future results, and these complex market dynamics warrant consultation with financial advisors for personalized guidance.
A Payment Evolution, Not Revolution
While stablecoins will likely compress payment fee pools over time, the transition appears gradual rather than revolutionary. The combination of regulatory hurdles, consumer preferences for card rewards, and the networks' adaptive strategies suggests evolution rather than extinction for the traditional payment ecosystem.
As one payment industry veteran summed it up: "Today's selloff looks more like a risk premium reset than the beginning of a secular decline. Smart money will watch Capitol Hill closely, but won't be writing obituaries for Visa and Mastercard anytime soon."
Disclaimer: This analysis is based on current market conditions and represents informed opinion rather than certainty. Investors should conduct their own research and consider their personal financial circumstances before making investment decisions.