Walmart Cryptocurrency Patent Just The Latest Of A String Of False Starts

Walmart store in Teterboro, New Jersey...

Walmart's reported crypto patent could be another attempt by the retail giant to gain entry into the financial sector, according to one expert. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)

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The past few weeks have yielded numerous stories about a crypto asset that Walmart reportedly submitted a patent for. This endeavor could be another attempt by the retail giant to gain entry into the financial sector, according to one expert.

"Walmart has been trying for the better part of the past two decades to obtain a bank charter or license, applying on numerous occasions only to later abandon its application each time," Joe Ciccolo, president of bitcoin compliance company BitAML, said to me via email correspondence. Ciccolo knows the banking industry well as he worked for several years as a bank compliance analyst at State Farm.

Ciccolo added,

"In this pursuit over the years, state and federal lawmakers have raised concerns and otherwise stymied Walmart's efforts. This seems to mirror the initial response among members of Congress to Facebook's Libra whitepaper. Regulators and lawmakers clearly have concerns - valid concerns I might add - about dominate players in one industry (e.g. Walmart in retail, Facebook in social media) entering the financial services industry." 

In 2007, The New York Times reported on Walmart "withdrawing its application to obtain a special banking charter after a firestorm of criticism from lawmakers, banking industry officials and watchdog groups." In a 2006 article, The Wall Street Journal revealed another similar effort from Walmart that began in 2005.

Developing native crypto assets has been a hot topic in 2019, especially since Facebook released a whitepaper explaining its intentions for its own digital asset, Libra. The topic has since garnered many regulatory talks and discussions.

On August 2, 2019, crypto media outlet CoinDesk reported that Walmart turned in an "application with the U.S. Patent and Trademark Office," for a digital asset with a value fixed to that of a traditional currency. In cryptocurrency jargon, this type of asset is called a stablecoin.

The application lists two different filing dates: January 29, 2019, and January 31, 2018. Walmart, however, stated no plans for a cryptocurrency patent, according to my email correspondence with a Walmart representative. "[W]e don’t have any plans for this patent at this time," the Walmart representative wrote in an August 5, 2019 email answering my probe for details on a cryptocurrency patent.

Even though the Walmart representative said no crypto asset patent is in the works, the public is still left with Walmart's patent application, the subject of CoinDesk's article.

Ciccolo mentioned a few speculations on why Walmart may be looking into such an asset. "Walmart may be interested in fostering crypto as a customer payment vehicle in place of card payments or as a customer store of value that serves as an alternative to a traditional bank account, as well as a potential mechanism to pay vendors across its vast supply chain," he said. "At scale, there may be a significant cost saving to Walmart on the fees and surcharges associated with these financial transactions."

If the retail giant is indeed attempting to develop such an asset, Ciccolo said he doesn't think it, or Facebook's Libra, will receive regulatory approval. He also said "it's highly unlikely" the situation will change in the future, referring to regulators' reservations on non-financial entities entering the financial ring.

"While it may be impractical for the government to effectively ban companies in other industries from entering the financial services industry, lawmakers or regulators are likely to restrict such a cross-over based on the prospective registrant or licensee's market cap, revenue, or other measures of scale or potential market impact," Ciccolo said.

  

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The past few weeks have yielded numerous stories about a crypto asset that Walmart reportedly submitted a patent for. This endeavor could be another attempt by the retail giant to gain entry into the financial sector, according to one expert.

"Walmart has been trying for the better part of the past two decades to obtain a bank charter or license, applying on numerous occasions only to later abandon its application each time," Joe Ciccolo, president of bitcoin compliance company BitAML, said to me via email correspondence. Ciccolo knows the banking industry well as he worked for several years as a bank compliance analyst at State Farm.

Ciccolo added,

"In this pursuit over the years, state and federal lawmakers have raised concerns and otherwise stymied Walmart's efforts. This seems to mirror the initial response among members of Congress to Facebook's Libra whitepaper. Regulators and lawmakers clearly have concerns - valid concerns I might add - about dominate players in one industry (e.g. Walmart in retail, Facebook in social media) entering the financial services industry." 

In 2007, The New York Times reported on Walmart "withdrawing its application to obtain a special banking charter after a firestorm of criticism from lawmakers, banking industry officials and watchdog groups." In a 2006 article, The Wall Street Journal revealed another similar effort from Walmart that began in 2005.

Developing native crypto assets has been a hot topic in 2019, especially since Facebook released a whitepaper explaining its intentions for its own digital asset, Libra. The topic has since garnered many regulatory talks and discussions.

On August 2, 2019, crypto media outlet CoinDesk reported that Walmart turned in an "application with the U.S. Patent and Trademark Office," for a digital asset with a value fixed to that of a traditional currency. In cryptocurrency jargon, this type of asset is called a stablecoin.

The application lists two different filing dates: January 29, 2019, and January 31, 2018. Walmart, however, stated no plans for a cryptocurrency patent, according to my email correspondence with a Walmart representative. "[W]e don’t have any plans for this patent at this time," the Walmart representative wrote in an August 5, 2019 email answering my probe for details on a cryptocurrency patent.

Even though the Walmart representative said no crypto asset patent is in the works, the public is still left with Walmart's patent application, the subject of CoinDesk's article.

Ciccolo mentioned a few speculations on why Walmart may be looking into such an asset. "Walmart may be interested in fostering crypto as a customer payment vehicle in place of card payments or as a customer store of value that serves as an alternative to a traditional bank account, as well as a potential mechanism to pay vendors across its vast supply chain," he said. "At scale, there may be a significant cost saving to Walmart on the fees and surcharges associated with these financial transactions."

If the retail giant is indeed attempting to develop such an asset, Ciccolo said he doesn't think it, or Facebook's Libra, will receive regulatory approval. He also said "it's highly unlikely" the situation will change in the future, referring to regulators' reservations on non-financial entities entering the financial ring.

"While it may be impractical for the government to effectively ban companies in other industries from entering the financial services industry, lawmakers or regulators are likely to restrict such a cross-over based on the prospective registrant or licensee's market cap, revenue, or other measures of scale or potential market impact," Ciccolo said.

  

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I am a full-time writer in the cryptocurrency space. My writing experience includes writing for Crypto Insider, CCN, and CryptoPotato on news and other important concep

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