Key Takeaways
- Western Union is exploring stablecoin-powered settlement and wallet solutions.
- Rivals, including MoneyGram and Zepz, already offer stablecoin services.
- Around the world, major banks are also exploring the technology.
Western Union has announced plans to launch U.S. Dollar Payment Token (USDPT)—a new stablecoin on Solana that will help power the firm’s global money transfer network.
While other remittance providers have integrated existing stablecoins, Western Union’s proprietary solution resembles the strategy being pursued by banks.
Western Union’s Stablecoin Push
Cross-border payments present a key emerging use case for stablecoins. And while they may initially have posed a threat to old-school money transfer operators, many are now taking an “if you can’t beat them, join them” approach.
Speaking earlier this year, Western Union CEO McGranahan insisted: “We see stablecoins as an opportunity, not as a threat.” But the firm initially lagged behind some of its main rivals.
MoneyGram and WorldRemit-owner Zepz have already adopted the technology, offering crypto wallets that let users send and receive USDC. Remitly has also announced plans to launch a USDC wallet.
Unlike its peers, however, Western Union has opted for own proprietary stablecoin, partnering with Anchorage Digital for issuance.
McGranahan was forthcoming about the advantages of this model. “USDPT will allow us to own the economics linked to stablecoins,” he stated on Tuesday, Oct. 28.
However, the firm continues to develop more generalist crypto services, too.
More Announcement to Come?
Alongside USDPT, Western Union also announced Digital Asset Network, which will let wallet providers tap into its global agent network to offer cash off-ramps for digital assets.
Moreover, while the firm has already secured the USDPT trademark, another application the U.S. Patent Office on Wednesday, Oct. 29, reveals that it is also seeking to trademark “WUUSD.”
Whether the filing indicates unnanounced stablecoin plans remains uncertain. The company may simply be seeking to prevent others from claiming a name that implies an association.
How Stablecoins Are Transforming Remittances
Stablecoin wallets are especially compelling in some of the emerging markets that rely heavily on remittance inflows.
As McGranahan acknowledged during an earnings call on Thursday, “in many parts of the world, being able to hold a U.S. dollar-denominated asset has real value as inflation and currency devaluation can rapidly erode an individual’s purchasing power.”
Beyond consumer-facing wallets, remittance providers are also integrating stablecoins into their cross-border settlement systems.
With near-instant finality and predictable fees, stablecoins offer potential advantages over the SWIFT-based correspondent banking system.
As Western Union looks to incorporate stablecoins into its treasury operations, “we see significant opportunities for us to be able to move money faster with greater transparency and at lower cost,” McGranahan said.
TradFi Embraces Blockchain Payments
Unlike international bank transfers that can take days to settle, stablecoins and other blockchain-based payment rails move money at the speed of the internet.
At the risk of losing market share to digital insurgents, traditional financial institutions are racing to catch up.
SWIFT is building its own blockchain platform. Visa and Mastercard are racing to integrate crypto payments. And major banks around the world are developing proprietary stablecoin and tokenized deposit systems.
Interest in bank-issued stablecoins has exploded since the GENIUS Act was passed in the U.S. Institutions leading the race include Bank of America, Citigroup, and JPMorgan. Meanwhile, banks in South Korea, Japan, and the EU have turned their attention to domestic currencies.
Like USDPT, these emerging solutions can help minimize counterparty risk because firms don’t have to entrust their money to Tether or Circle. (Although Western Union has placed its faith in Anchorage Digital). Moreover, proprietary stablecoins bring reserve profits in-house, creating an additional source of revenue for issuers.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
