Walmart Inc. (WMT), the nation's largest retailer and a leader in the use of blockchain technology that is facing intense competition from tech giants like Amazon.com Inc. (AMZN), may introduce digital coins across its close to 11,000 stores in more than two dozen countries. The company has applied to patent a method of utilizing a digital coin which is pegged to a traditional fiat currency, according to a filing published on August 1 by the U.S. Patent and Trademark Office. If successful, the method could enable transactions that are both faster and less expensive than alternatives, as well as offer loyalty features. Walmart has already been at the vanguard of the blockchain space, and it now appears that the retail giant is following in the steps of other major companies like Facebook (FB) in exploring new opportunities available through cryptocurrencies.

Prior Blockchain Integration Efforts

For the last year, Walmart has partnered with IBM (IBM) to revolutionize its produce supply chain with the use of blockchain technology, according to TechCrunch; suppliers must upload data to a blockchain ledger to aid in efficiency should an issue like a product recall come up. Blockchain has allowed the once-manual process to become fully digitized, and in doing so has increased transparency and traceability as well.

New Patent Application Details

Facebook recently made headlines when it announced it would launch its own platform-wide digital currency. Walmart's next venture into the digital currency space looks somewhat different. Per the patent application, which details a "system and method for digital currency via blockchain," Walmart seeks to patent a process whereby a unit of a digital currency which is linked to a "regular" currency, in this case the U.S. dollar. Transactions involving this digital token will be executed and recorded via a blockchain ledger in the manner of Bitcoin and many other cryptocurrencies. Key to Walmart's method, though, is the subsequent linking of transaction data with customer purchase history.

Linking the transactions with purchase history will allow Walmart to determine savings based on a comparison of the digital currency against naked forecast uncertainties. These savings can then be applied to customer purchases.

What It Means

Walmart's patent application discusses several potential applications of this new digital token process. First, the application suggests that "low-income households that find banking expensive" may be able to use the token as an alternative method of handling wealth. The token could also be utilized for "crowdsource work" such as acting as "a repair technician for a few hours," with workers paid via the digital token ecosystem. The application even suggests that this new token system could be used in place of credit and debit cards, with the token potentially acting as a "pre-approved biometric" credit. Walmart also leaves open the possibility of creating micromarkets based upon the token ecosystem and of launching futures based on the currency as well. Customers utilizing the token could "even earn interest" on their digital currency accounts.

While there remain numerous regulatory hurdles and unknowns about Walmart's plans regarding this new digital currency system, the patent application indicates that one of the world's largest companies may be dramatically altering its approach to payments and business.