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Investing.com -- Visa (NYSE:V) stock fell 5.4%, Mastercard (NYSE:MA) dropped 4.6%, and American Express (NYSE:AXP) declined 2% after a Wall Street Journal report revealed major retailers are exploring stablecoin options to bypass traditional card payment fees. Other payment processors also suffered, with Capital One (NYSE:COF) down 3%, PayPal (NASDAQ:PYPL) falling 2.6%, and Block dropping 2.4%.
According to the report, retail giants including Walmart (NYSE:WMT) and Amazon.com (NASDAQ:AMZN) have recently explored issuing their own stablecoins in the U.S., a move that could potentially save them billions in transaction fees by shifting payment processing outside the traditional financial system. Expedia (NASDAQ:EXPE) Group and several major airlines have reportedly engaged in similar discussions.
Stablecoins, which maintain a one-to-one exchange ratio with government currencies and are backed by cash reserves or cash-like assets such as Treasury securities, are currently primarily used for cryptocurrency transactions. However, their potential application in everyday retail transactions poses a significant threat to established payment networks.
The retailers’ final decisions reportedly hinge on the Genius Act, pending legislation that would establish a regulatory framework for stablecoins. While the bill has cleared a procedural hurdle, it still requires approval from both the Senate and House.
The potential entry of major retailers into the payment processing space with their own digital currencies could significantly disrupt the business model of traditional payment networks, which generate substantial revenue from transaction fees charged to merchants.