It’s not about Consumer 

My best guess

Recent media reports have ignited speculation about the entry of Amazon and Walmart into the stablecoin. The dominant narrative surrounds consumer use and the desire to endrun card processing fees. IMHO this perspective represents a fundamental misreading of the strategic calculus for a global supply chain “masters” and overlooks the far larger, more complex lucrative prize: the radical optimization of its global treasury operations. An “On Us” that spans the globe and encompasses all of amazon’s marketplaces, AWS services, Advertising,… and everything else.  A proprietary, closed-loop financial rail that serves as the financial backbone for its vast network. 

This is not an initiative to launch a new payment method; it is a calculated move to construct a new layer of financial infrastructure. This infrastructure is designed to streamline business-to-business (B2B) payments, enhance global cash management, and forge a powerful new economic flywheel that binds participants more tightly to the Amazon platform than ever before.

Why Amazon Loves Cards

In OECD 20 markets, consumer payment behavior is deeply entrenched. Decades of market development have solidified credit and debit cards as the preferred method for non-cash transactions, valued for their convenience, security, robust dispute resolution mechanisms, and integrated loyalty rewards. 

Data from central banks confirms this reality. As both the European Central Bank (ECB) and Federal Reserve’s 2024 Diary of Consumer Payment Choice shows that while online payments are growing, credit cards have seen their usage nearly double since 2016, while cash use has halved. In 2023, consumers increasingly stated a preference for credit cards for both in-person and online payments. Forcing a behavioral card and toward a proprietary stablecoin would introduce significant consumer friction.

Contrary to the narrative that Amazon is a victim of high card fees, they operate at a cost ADVANTAGE in processing card payments (given the company’s transaction volume) compared to the smaller retailers. While Amazon Pay’s public-facing fees for merchants using its gateway are competitive with services like Stripe and PayPal at 2.9% plus $0.30 per transaction, its internal, blended cost for processing payments on its own marketplace is undoubtedly much lower (~50bps-70bps). This is a meaningful advantage in retail were net margins are 150bps. 

All of the large retailers benefit from this dynamic, which reinforces the digital commerce habits that drive customers to its platform. 

Within the United States and Europe and other OECD 20 markets, cards will remain the dominant choice. Amazon’s strategic focus, therefore, must lie elsewhere in the far less efficient world of corporate finance (and non OECD 20 markets for consumer).

Revolutionizing Global Treasury and Cash Management

For a multinational enterprise operating on Amazon’s scale, the existing global financial system is a source of significant friction. The backbone of international B2B payments is the correspondent banking system, a network of intermediary banks that route funds across borders. As funds pass through multiple institutions, each bank takes a bite from either Amazon or its suppliers. 

• Foreign Exchange (FX) Management: Amazon operates in dozens of countries, necessitating constant management of currency conversions and hedging against FX volatility. These operations are not only costly but also add significant complexity to financial planning.
• Trapped Liquidity and Working Capital Inefficiency: The delays inherent in the traditional system mean that vast sums of cash are often “in-flight” or trapped in regional accounts to pre-fund payments. This inability to move liquidity instantly across the globe on a 24/7 basis is a major drag on working capital efficiency.

Stablecoin as a Treasury Solution

A proprietary, dollar-pegged stablecoin offers a direct and powerful solution to these long-standing treasury challenges. By creating its own blockchain-based payment rail, Amazon can effectively bypass the entire correspondent banking apparatus for internal and ecosystem transactions.

• Instant Global Settlement: An “Amazon Coin” would enable 24/7/365 fund transfers. Amazon’s treasury could move millions of dollars to and from any partner or subsidiary allowing for real-time optimization of its global cash positions without being constrained by banking holidays or wire cut-off times.
• Cost Annihilation: By internalizing these transfers, the stablecoin eliminates intermediary bank fees, correspondent bank charges, and a significant portion of FX conversion costs. Transactions that previously incurred layers of fees would now have a marginal cost approaching zero.
• Suppliers are also buyers of AWS, Amazon Advertising. Creating further efficiencies by keeping money in the system (and away from bank fees).
• Programmable Treasury (longer term): Beyond speed and cost, stablecoins introduce the concept of “programmable money.” An Amazon Coin could be integrated with smart contracts to automate complex financial logic. For example, payment to a supplier could be automatically triggered and executed the instant a logistics system confirms delivery of goods to a fulfillment center. Royalty payments to content creators on Prime Video could be streamed in real-time as their content is viewed. This moves beyond simple payment processing into the realm of automated, event-driven financial operations, a concept already being explored by institutions like J.P. Morgan and Citi.

This strategic shift also transforms the corporate treasury from a cost center into revenue generator. Stablecoin issuers, such as Circle (issuer of USDC), derive substantial revenue from the interest yield on the high-quality liquid assets, primarily short-term U.S. Treasuries, that back the coins in circulation.  Given Amazon’s scale a significant amount of value would exist as float within the stablecoin ecosystem. If Amazon were to hold even a conservative $50 billion in U.S. Treasury reserves to back its circulating stablecoin, a 4% annual yield would generate $2 billion in low-risk, high-margin revenue. 

The “On-Us” Ecosystem

The strategic linchpin of an Amazon Coin is the creation of a massive “on-us” financial ecosystem. In banking terminology, an on-us transaction is one where the bank of the payer and the bank of the payee are the same institution. This allows the transaction to be processed internally, bypassing external networks and their associated costs and complexities.²⁴ The most successful modern precedent for this strategy is J.P. Morgan’s ChaseNet. When a consumer uses a Chase-issued credit card at a merchant whose payment processing is handled by Chase Merchant Services, the transaction can be routed directly through Chase’s internal systems, bypassing the Visa network entirely. This closed-loop system provides J.P. Morgan with improved economics and greater control over the transaction flow.^. 

Amazon is uniquely positioned to deploy this “on-us” model at an unprecedented scale, creating a self-reinforcing financial flywheel. The process would function as follows:

1. Payout in Amazon Coin: Amazon disburses payments to its millions of third-party Marketplace sellers for the products they’ve sold. Instead of sending U.S. dollars or other fiat currencies via traditional banking rails, it credits their accounts with its proprietary, dollar-pegged stablecoin.
2. Recirculation of Value: These same Marketplace sellers are also major customers of other Amazon divisions. They are heavily reliant on Amazon Web Services (AWS) for their cloud computing infrastructure and on Amazon Advertising to market their products. They would then use the Amazon Coin they just received to pay their AWS and advertising invoices.
3. Value Capture and Ecosystem Lock-in: The funds used for these massive B2B transactions never leave the Amazon ecosystem. The entire cycle—from consumer purchase to seller payout to seller payment for services—is settled internally using the Amazon Coin.¹ This closed loop completely avoids external bank transfer fees, FX conversion costs, and settlement delays, capturing immense value for Amazon and its ecosystem participants.

This strategy is more than just an efficiency play; it is a mechanism for building a formidable strategic moat. By controlling the financial rails of its ecosystem, Amazon gains unprecedented, real-time visibility into the financial health, cash flow, and business cycles of its entire supplier network.²⁶ This rich data stream is a priceless strategic asset. It can be used to develop and more accurately underwrite new financial products for sellers, such as inventory financing or working capital loans, with a level of risk assessment that no external bank could match. This transforms the stablecoin from a payment tool into an engine for a new, highly-informed, and highly profitable lending business. Furthermore, by establishing the Amazon Coin as the native currency of its B2B ecosystem, Amazon dramatically increases switching costs. A supplier whose revenue, expenses, and financing are all deeply integrated into this system would find it operationally and financially disruptive to move its business to a competing platform. The stablecoin becomes the financial glue that holds the ecosystem together.

… and Consumer Use in Emerging Markets

While the primary driver for an Amazon Coin is B2B treasury optimization, a compelling consumer-facing use case does exist, but not in the developed world. The strategy is geographically divergent, targeting the unique economic conditions of emerging markets across Latin America, Africa, and parts of Asia.¹² These regions present a stark contrast to the stable, low-inflation, and well-banked economies of the OECD.

As outlined previously stablecoins solve fundamental economic banking and fiat currency challenges.

• Inflation and Currency Volatility: In countries like Argentina, Nigeria, Brazil, and Turkey, high inflation and volatile local currencies constantly erode the value of savings. A USD-pegged stablecoin provides a crucial tool for wealth preservation, allowing individuals and businesses to effectively hold and transact in a digital dollar, shielding them from local economic instability.
• Financial Inclusion: Large segments of the population in these regions remain underbanked or unbanked, lacking access to traditional financial services. Stablecoins, accessible via a basic smartphone and a digital wallet, offer a gateway to the global digital economy, enabling participation in e-commerce and international trade without a bank account.

Cross-Border Payments and Remittances: Traditional remittance services are notoriously expensive, with fees that can be prohibitively high. Stablecoins provide a significantly faster, cheaper, and more transparent alternative for the billions of dollars in remittances and B2B payments flowing into these economies.