Western Union (WU), a century-and-a-half-old money-transfer giant, is gearing up to introduce a stablecoin initiative that could revolutionize its global payment settlement processes. During the firm’s first-quarter earnings call, CEO Devin McGranahan revealed that Western Union’s U.S. dollar-pegged stablecoin (USDPT) is nearing completion and anticipated to launch imminently. Announced in October, this digital currency will be built on Solana (SOL) and issued by federally chartered cryptocurrency bank Anchorage Digital.
Initially, the company plans to utilize USDPT as a substitute for its current interbank settlement mechanisms used to transfer funds between itself and its agents. “We are not launching [USDPT] with consumers in mind initially,” stated McGranahan. “It will serve as an alternative to the SWIFT network we currently use for settlements.”
The shift is significant, he explained, because Western Union’s operations still rely on traditional banking systems that operate only during business days and can take up to three days to process transactions in certain markets. By employing stablecoins, the company aims to facilitate real-time settlements with partners even over weekends and holidays while reducing capital tied up within these systems.
Additionally, the firm is developing its Digital Asset Network (DAN), which will allow cryptocurrency wallet companies to provide Western Union as a cash-out option. This initiative will enable users of these wallets to convert digital assets into local currencies via Western Union’s extensive retail network, McGranahan detailed.
Western Union has disclosed that its partner pipeline consists of tens of millions of crypto wallets globally. Furthermore, the company is set to introduce a Stable Card later this year, allowing customers to hold funds in stablecoins and utilize them through card networks. This innovation could be particularly beneficial in markets sensitive to inflation, where access to U.S. dollar-denominated value with everyday spending capabilities is desired.
“We anticipate launching this across multiple markets starting later this year,” McGranahan mentioned regarding the card’s rollout plan.
The push towards stablecoins by Western Union emerges as its traditional remittance business contends with increasing competition from fintechs and crypto payment firms that leverage blockchain technology for cross-border payments. For instance, MoneyGram is exploring Circle’s USDC stablecoin, whereas Stripe has developed a stablecoin infrastructure alongside a payments-focused chain called Tempo.
Read more: DoorDash plans to expand stablecoin payments to the masses using Stripe’s blockchain support.