Amazon's Stablecoin Challenge vs. Visa & Mastercard's Defense: Who Will Prevail?

# The Potential Impact of Walmart and Amazon Stablecoins: Can Visa and Mastercard Withstand the Challenge? The emergence of retailer-driven stablecoins, especially from industry giants like Amazon and Walmart, has the potential to disrupt the current financial ecosystem significantly, posing serious questions about the future of traditional card networks. As dollar-backed stablecoins gain traction, the relationships between major retailers and established financial institutions, particularly card companies, may be set for a transformation. On October 13, Bloomberg reported that shares of Visa and Mastercard plummeted following speculations about the development of proprietary stablecoins by leading U.S. retailers. The report also noted a split among investors regarding whether this selloff represents a buying opportunity for card company stocks. # Visa and Mastercard Lose $60 Billion in Market Cap Visa and Mastercard shares fell by 7.1% and 6.2%, respectively—marking their sharpest declines in two months. Shares of other financial service companies, including American Express, PayPal, and Capital One, also experienced declines. The downturn was driven by reports that retail giants like Walmart and Amazon are exploring proprietary crypto payment solutions to reduce credit card fees. Online travel agency Expedia and several airlines are also reportedly in discussions, considering the advantages of stablecoins for lowering transaction costs. # A Buying Opportunity, Say Analysts Despite the market’s sharp reaction, experts argue that the selloff may be exaggerated. William Blair analyst Andrew Jeffrey emphasized that Visa and Mastercard remain attractive investment options. “Stablecoins are not particularly well-suited for consumer transactions,” he noted. Diksha Gera, an analyst at Bloomberg Intelligence, highlighted that while stablecoins could theoretically lower transaction fees, significant trust and regulatory barriers persist. “The current structure is not one that consumers can easily adopt,” she explained. Rufus Hone, an analyst at BMO Capital Markets, reassured investors that Visa and Mastercard could still benefit even if stablecoins become commercially viable. “Both companies already have the technology to handle stablecoins and are actively adapting to changes,” he stated. # Market Resilience Amid a $60 Billion Blow The fallout from the stablecoin speculation led to more than $60 billion being wiped off Visa and Mastercard’s combined market capitalization. However, industry experts point to these companies' robust network infrastructures and their existing ability to integrate with stablecoin technology as reasons for optimism about their future. As the financial sector grapples with this potential disruption, market participants are closely monitoring developments, particularly the regulatory environment and consumer adoption of stablecoins, to determine the ultimate impact on traditional payment systems.