Stablecoins infiltrate deeper into global finance as Western Union enters crypto

Western Union is piloting stablecoin remittance settlements in select corridors across South America and Africa, part of a closed-loop test announced by CEO Devin McGranahan during interviews on July 22.

The company is also evaluating the development of a consumer-facing crypto wallet, signaling broader ambitions to integrate blockchain-based infrastructure into its global money transfer operations.

The remittance provider’s controlled rollout reflects shifting priorities as traditional financial intermediaries face mounting pressure from stablecoin-native solutions offering faster, cheaper transfers. Western Union sees the crypto rails not as a competitive threat but as a mechanism to improve foreign exchange conversion, settlement times, and asset custody in difficult-to-reach markets, according to McGranahan.

The pilots come amid new legislative clarity in the United States. The GENIUS Act, signed into law on July 18, mandates 1:1 fiat backing and monthly attestations for dollar-pegged stablecoins and grants issuers access to Federal Reserve master accounts, provided they hold FDIC insurance. The move is already accelerating stablecoin adoption among traditional payment providers, many of whom had previously refrained from on-chain integrations due to legal ambiguity.

Global remittances reached an estimated $685 billion in 2024, per World Bank data, with low- and middle-income countries capturing the bulk of inflows. However, fees on these transactions remain stubbornly high. The average cost of sending $200 across borders through traditional cash-to-cash networks stood at 6.6% in Q1 2024, more than double the 3 percent target outlined in the United Nations’ Sustainable Development Goals.

Western Union’s position in that ecosystem has come under strain. Internal data shows that 28% of its Consumer Money Transfer transactions were digital as of Q1 2025, and mobile app usage has declined 22% year over year. As on-chain remittance options become more accessible, users are shifting to platforms that settle transfers in minutes with sub-1% fees, such as MoneyGram’s Stellar-based USDC solution.

McGranahan identified three use cases for stablecoins in Western Union’s roadmap: real-time settlement with local partners, improved FX pricing in low-liquidity corridors, and optional customer custody for cross-border transfers. While details remain sparse, the firm’s emphasis on pilot-scale testing rather than wholesale conversion indicates a measured approach.

How will Western Union adopt stablecoins?

Western Union has not yet disclosed which stablecoins or blockchains are in use, nor has it clarified whether the wallet product under consideration would be proprietary or partner-based. However, competitive pressure is building. PayPal has integrated its PYUSD stablecoin into international payout rails, and MoneyGram already offers crypto off-ramps in more than 180 countries. Meanwhile, neo banks like Revolut and even tradFi banks are actively seeking licenses to issue their own U.S. dollar-pegged tokens, according to reports.

Stablecoins themselves have grown substantially in terms of institutional footprint. The aggregate value of Treasury-bill-backed reserves across leading stablecoins is now estimated at over $150 billion and could reach $2 trillion by 2028 under high-adoption scenarios. With Circle’s new Payments Network courting banks and payment service providers and Tether holding more T-bills than most nations, incumbent firms face increasing incentives to participate in crypto-native settlement layers rather than compete against them outright.

Western Union’s strategy also aligns with geopolitical currents. The Trump administration’s proposal to impose a remittance tax on U.S. outbound transfers, aimed at reducing cross-border capital flight, could inadvertently boost stablecoin adoption by pushing consumers toward cheaper, tax-neutral digital alternatives. Critics argue that such policy shifts will amplify demand for decentralized tools rather than curb them.

Pilot and US relevance

While the firm has not confirmed timelines for a public rollout, McGranahan hinted at corridor-specific metrics as key indicators of success. These include FX spread reduction, time-to-cash statistics, and the per-transaction economics relative to legacy settlement via the WUNet infrastructure. Any potential expansion of the program or wallet launch may be detailed in Western Union’s next earnings call, scheduled for October 2025.

The pilots reflect a broader industry transition, as payment giants previously hesitant to embrace blockchain now begin to test on-chain tools in live environments. Whether Western Union will seek a banking charter to issue its own stablecoin or instead rely on existing issuers remains unresolved.

However, Western Union may be more comparable to Tether than US-based stablecoins. Both generate most of their volume outside the United States, targeting people in emerging-market corridors who turn to dollar-linked transfers because local banking rails or physical USD are hard to access.

In fact, Western Union’s latest 10-K shows that about 65 % of its 2023 revenue ($2.85 billion of US $4.36 billion) was earned abroad, while market-tracker data indicates that U.S. exchanges see only ~$3 billion of the more than US $30 billion in daily USDT trades, meaning roughly 90 % of Tether volume is executed on offshore venues like Binance, OKX and Bybit.

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