Stocks markets react to news all the time. Most of the time the reaction is either wrong headed or simply stupid. On Friday the 13th we saw a drop in the share prices of both Mastercard and Visa. It was attributable to a report in the Wall Street Journal which has now become a dish rag of epic proportions: Walmart, Amazon Explore Stablecoins as Senate Advances Regulatory Framework.
Walmart and Amazon are actively exploring the issuance of their own stablecoins, a move that could upend the traditional payments ecosystem and potentially save these retail giants billions in transaction fees, according to a report from The Wall Street Journal. Sources familiar with the matter indicate that other large multinationals, including Expedia Group and major airlines, are also considering similar initiatives, signalling a potential shift in how high-volume merchants handle payments in the U.S.
The reality is somewhat different as was pointed out in a slew of articles following this announcement. At the same time, Mastercard has been exploring Stablecoins anyway. Here is a press release from Mastercard about about two months ago: Mastercard unveils end-to-end capabilities to power Stablecoins transactions – from wallets to checkouts.
Latest partnerships with OKX and Nuvei will unlock a 360-degree approach where consumers can spend Stablecoins and merchants can receive them, creating a seamless ecosystem.
Additionally, Mastercard’s collaboration with MoonPay enables Stablecoins payments across its network, allowing businesses and consumers to pay or receive payments in Stablecoins. This partnership uses technology from Iron, a Stablecoins infrastructure platform recently acquired by MoonPay.
Of course the stocks to a dive of around 4% based solely in the ignorance of the market and the way it reacts to news. I saw this and immediately thought that it’s not great news and perhaps I should sell on the news. Whoa, wait a minute. It’s far from clear that notwithstanding the noise that you hear, that a switchover by consumers will happen at all. Likely just another market overreaction.
Lesson to Be Learned
Mr. Market is not an easy place to survive if you watch the news everyday. Research the topic and come to your own conclusions. Do not be headline driven and follow the buffalo off the cliff.
