Western Union Follows Banks Into Stablecoin Integration

Western Union is piloting new stablecoin-based solutions. Credit: Michael Nguyen/NurPhoto via Getty Images.

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 is actively piloting stablecoin settlement rails, CEO Devin McGranahan confirmed on Thursday, Oct. 24.

The move is intended to “reduce dependency on legacy correspondent banking systems.” But as Western Union and its remittance market peers embrace the technology, banks themselves are also active in the space.

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, McGranahan insisted: “We see stablecoins as an opportunity, not as a threat.” But Western Union lags 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.

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 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.”

While he didn’t provide precise details, the Western Union CEO said “we are expanding our partnerships and capabilities to allow customers to move and hold” stablecoins.

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.

Story Continues

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.

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