TLDR
- Western Union will pilot a stablecoin-based settlement system for its 150 million customers to reduce reliance on traditional banking systems
- CEO Devin McGranahan says the pilot aims to move money faster with greater transparency and lower costs while maintaining compliance
- The company changed its stance on crypto after passage of the GENIUS Act, which addressed previous concerns about volatility and regulation
- Western Union processes 70 million transfers quarterly across 200+ countries and sees stablecoins as beneficial for customers in high-inflation nations
- Competitors Zelle and MoneyGram are also integrating stablecoins, with MoneyGram launching a crypto app in Colombia for USDC savings and transfers
Western Union announced plans to pilot a stablecoin-based settlement system during its third-quarter earnings call on Thursday. CEO Devin McGranahan outlined the initiative that could affect the company’s 150 million customers worldwide.
Western Union revealed in its Q3 earnings call that it will launch a stablecoin settlement pilot to reduce reliance on traditional correspondent banks and improve efficiency via on-chain networks. The company processes around 70 million transfers each quarter across 200+…
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The pilot program focuses on using blockchain settlement rails to reduce dependency on legacy correspondent banking systems. McGranahan stated the goal is to shorten settlement windows and improve capital efficiency.
“We see significant opportunities for us to be able to move money faster with greater transparency and at lower cost without compromising compliance or customer trust,” McGranahan said. Western Union currently processes around 70 million transfers each quarter.
The company serves customers in more than 200 countries. Blockchain technology could provide advantages over traditional remittance systems for this global customer base.
Western Union first mentioned plans to integrate stablecoins for cross-border transfers about three months ago. The latest earnings call provided more details about the upcoming pilot program.
McGranahan explained that Western Union initially avoided crypto due to concerns about volatility, regulatory uncertainty, and customer protection. The passage of the GENIUS Act changed the company’s approach to digital assets.
Stablecoin Benefits for High-Inflation Regions
Western Union said the stablecoin offering will give customers more choice in managing and moving their money. The company specifically highlighted benefits for people in countries experiencing high inflation.
“In many parts of the world, being able to hold a US dollar-denominated asset has real value as inflation and currency devaluation can rapidly erode an individual’s purchasing power,” the company stated. This aligns with Western Union’s strategy to modernize money movement.
The stablecoin market recently surpassed $300 billion in total value. The US Treasury Department estimated in April that the market could reach $2 trillion by 2028.
Competition Moves Toward Stablecoins
Early Warning Services, which owns payments platform Zelle, announced on Friday that it will integrate stablecoins into Zelle. The integration will facilitate cross-border transactions for money flowing to and from the United States.
MoneyGram confirmed plans to roll out its crypto app in Colombia soon. The app will allow locals to save in Circle’s USDC stablecoin.
Users will be able to receive and transfer USDC overseas nearly instantly through the MoneyGram app. These moves by competitors show a broader industry shift toward stablecoin integration.
Western Union’s pilot represents the company’s entry into blockchain-based remittance services. The program aims to maintain compliance and customer trust while exploring new technology for money transfers.
