Is This 1 Move By Western Union a Reason to Sell XRP?

Key Points

Western Union is going to launch a stablecoin on Solana next year. It's essentially a money transfer business. XRP was made for this exact use case, but it wasn't picked.10 stocks we like better than XRP ›

Western Union(NYSE: WU) just picked Solana(CRYPTO: SOL) to host its planned stablecoin and digital money transfer network that's set to reshape its operations and modernize them significantly. The chain will now potentially see tens of billions in new volume annually.

If you hold XRP(CRYPTO: XRP), that might feel like watching a plane take off after getting bumped from the flight. The network is sidelined from capturing any of the value from one of the biggest money transfer systems switching over to crypto-based settlement from its legacy tech. So is this a reason to sell the coin?

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This barely counts as a lost opportunity

Western Union plans to launch a new dollar-backed stablecoin, the U.S. Dollar Payment Token (USDPT), on Solana's chain in the first half of 2026. The company is also rolling out a Digital Asset Network to tie digital wallets and its fiat currency ramps together.

So why did Western Union choose to run this plan on Solana?

Western Union's gargantuan international consumer-to-consumer remittance flows are ideally processed very quickly, and very inexpensively. Solana's architecture is purpose-built for that profile. As a result, the company can reduce its working capital requirements and foreign exchange (FX) costs substantially, cut its overhead, deliver dramatically faster service to its customers, and potentially pass on the lower costs to them too. The upshot for it could be transformational if it commits to fully onboarding all of its transfer volumes to the chain over the course of the next few years. It will benefit Solana holders substantially as well along the way.

But none of this says anything about whether XRP and its ledger, the XRPL, are useful for financial institutions like banks and capital markets participants. It simply says Western Union optimized for its core demographic and product.

It's true that XRP was originally designed to process exactly these kinds of cross-border capital flows. It's also true that the chain's fees are quite low, that its transaction times are quick, and that its throughput is formidable. Nonetheless, there's a key difference between Solana and XRP, which was likely decisive here.

Whereas XRP is largely marketed toward institutional investors and financial institutions as a financial tool for trade settlement, money transfers, and asset management, Western Union is a business that's predominantly aimed at consumers who need to perform remittances internationally. This detail indicates that it isn't really in XRP's target market, even though it sure looks like it is.

The future still looks great for this asset

Although Western Union's selection emphasizes Solana's decent positioning for capturing consumer transfers, XRP's near-term catalysts run through institutions, and it doesn't need Western Union on its chain to continue to make headway on that front.

Financial institutions are incentivized to use XRP to be their home in the crypto sector because the XRPL includes many robust tools for attending to regulatory compliance. That's something that big banks and other regulated financial entities need to be on top of at every level of their workflows. On the XRPL, they can easily implement compliance tooling like trust lines, account authorization, and wallet freezes, allowing issuers to enforce transfer rules without bolting on a bunch of custom smart contracts and introducing complexity. Solana doesn't have the same feature set, so it isn't as much of a threat within XRP's actual target market.

More importantly, Ripple, the company that issues XRP, recently purchased the prime broker Hidden Road. This positions Ripple to offer cross-margining of assets and institutional trade execution under one roof. That feature set targets banks, asset managers, and corporate players, not remittance services or their customers. At the same time, consider that a business like Western Union might not have a use for those features.

Western Union on Solana is a win for that network in consumer remittances. But XRP's investment thesis is grounded in its chances of getting widespread institutional adoption, which means that it essentially lives in a different zip code. There's no reason to sell your XRP just because one of its peers with a different focus was able to bag a big new user, and there's plenty more growth on the way in the future.

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Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Solana and XRP. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.