Western Union to Pilot Stablecoin System for Faster Transfers
Western Union will test a new system using stablecoins to speed up and lower the cost of sending money worldwide. The company aims to reduce reliance on traditional banking networks for remittances.
CEO Devin McGranahan said on the third-quarter earnings call that the pilot will focus on using onchain settlement rails. This approach aims to shorten settlement times, cut costs, and improve capital efficiency.
McGranahan added, “We see significant opportunities for us to move money faster with greater transparency and at lower cost without compromising compliance or customer trust.” Western Union handles about 70 million transfers each quarter, and blockchain could make cross-border payments smoother.
Renewed Interest in Digital Assets
Western Union’s plan follows their initial caution on cryptocurrencies. They avoided crypto due to volatility, unclear regulations, and consumer protection issues. However, the recent approval of the GENIUS Act provided clearer rules for digital assets.
This legislation has encouraged the company to move forward with stablecoin integration. Western Union said stablecoins help people in countries with high inflation. Holding money pegged to the U.S. dollar protects savings when local currencies lose value.
The company stated, “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.” They view this project as part of their broader effort to modernize money transfers.
Competition Grows in Blockchain Payments
- Major payment firms are also exploring blockchain. Early Warning Services, which owns Zelle, plans to use stablecoins for U.S. cross-border transfers.
- MoneyGram will launch an app in Colombia that uses USDC for near-instant international transfers.
- Traditional banks, including Citigroup and JPMorgan, are developing blockchain and tokenized deposit systems for large clients.
The U.S. stablecoin market is already worth over $300 billion. It could grow to $2 trillion by 2028. Western Union’s pilot signals the growing shift to blockchain-based payments in finance.
