Western Union embraces stablecoin! 150 million customers cross-border remittance revolution starts.

The financial service company Western Union will trial a settlement system based on stablecoins to modernize its remittance business for over 150 million customers. In the third quarter earnings call, CEO Devin McGranahan stated that the pilot program “focuses on utilizing on-chain settlement channels to reduce reliance on traditional correspondent banking systems, shorten settlement windows, and improve capital efficiency.”

The Core Objective of the Western Union Pilot Program

(Source: Western Union)

Western Union CEO McGranahan clearly outlined the three core objectives of the pilot program during the earnings call. The first is to reduce reliance on traditional correspondent banking systems. Traditional cross-border remittances require navigating through a multi-layered network of correspondent banks, with each layer adding costs and time delays. Blockchain technology enables direct settlement on a peer-to-peer basis, significantly simplifying this complex process.

Secondly, shorten the settlement window. Traditional international remittances typically take 3 to 5 business days to complete settlement due to the review by multiple financial institutions, foreign exchange conversion, and fund clearing. The transfer of stablecoins on-chain can be completed in minutes or even seconds, operating 24/7 without the constraints of bank operating hours or time zones. This speed advantage is particularly important for recipients in urgent need of funds.

The third is to improve capital efficiency. Western Union needs to pre-allocate a large amount of liquid funds across multiple countries globally to ensure that remittances can be paid at any time. These locked funds cannot generate returns, constituting a huge opportunity cost. The instant settlement characteristics of stablecoins can significantly reduce the required reserves, and the released capital can be used for business expansion or other investments.

McGranahan emphasized: “We see significant opportunities to transfer funds faster with greater transparency and lower costs without compromising compliance or customer trust.” This statement reveals Western Union's shift in attitude towards stablecoins - from cautious observation to active embrace, while still adhering to compliance standards.

Western Union processes about 70 million transfers each quarter, with an annual transaction volume reaching 280 million. If the stablecoin pilot is successful and fully promoted, this will be one of the largest applications of stablecoins in actual payment scenarios. This level of adoption will significantly enhance the circulation and practicality of stablecoins, creating a positive cycle for the entire cryptocurrency ecosystem.

GENIUS Act Changes Western Union's Attitude

McGranahan admitted that Western Union initially abandoned the use of cryptocurrency due to concerns about volatility, regulatory uncertainty, and customer protection issues. This cautious attitude is extremely common among traditional financial institutions, as the remittance business involves the living expenses of millions of ordinary families, and any technical error or price fluctuation could have serious consequences. However, the passage of the GENIUS Act changed this direction.

The “GENIUS Act” (Guiding and Establishing National Innovation for US Stablecoins Act) provides a clear regulatory framework for stablecoins. The Act requires stablecoin issuers to hold an equivalent amount of high-quality liquid assets as reserves and undergo regular audits. This regulatory certainty alleviates Western Union's biggest concerns, allowing it to explore stablecoin applications within a compliant framework.

The announcement also reflects the broader adoption of stablecoins by institutions. According to the U.S. Treasury's announcement in April, the stablecoin market size has recently surpassed $300 billion and is expected to reach $2 trillion by 2028. This exponential growth demonstrates that stablecoins are transitioning from speculative instruments to actual payment infrastructure.

Stablecoin Market Growth Trajectory:

Current Scale: Over $300 billion (2025)

Forecast Size: 2 trillion USD (2028)

Compound Annual Growth Rate: Approximately 85%

Main Driving Factors: Institutional Adoption, Clear Regulation, Cross-border Payment Demand

Western Union's statement was made more than three months after it first hinted at plans to integrate stablecoins for cross-border transfers. This rapid advancement from conceptual exploration to concrete pilot projects demonstrates that management's confidence in stablecoin technology is rapidly increasing. Considering the decision-making speed of traditional financial institutions, completing the transition from concept to pilot in just three months is extremely fast.

Key Application Scenarios in High Inflation Countries

Western Union stated that the launch of stablecoins will provide customers (especially those in inflationary countries) with more choices and control, helping them manage and transfer funds. This application scenario may be one of the most socially valuable uses of stablecoins.

McGranahan pointed out: “In many parts of the world, holding dollar-denominated assets has real value, as inflation and currency devaluation can quickly erode individuals' purchasing power. These innovations align closely with our overall strategy for modernizing the flow of currency.” This statement reveals the unique value proposition of stablecoins in developing countries.

In high-inflation countries like Argentina, Turkey, and Venezuela, the annual inflation rate of the local currency can reach 50% or even over 100%. Ordinary people, even when receiving remittances from overseas relatives and friends, will lose purchasing power due to the rapid devaluation of the local currency. If they can directly receive and hold USD stablecoins, it can effectively protect the value of their assets.

More importantly, stablecoins provide a way to store value without the need for traditional bank accounts. In many developing countries, opening a dollar account requires high minimum deposit requirements and is often only available to high-net-worth clients. Stablecoins allow anyone with a smartphone and internet connection to hold dollar-denominated assets, making this financial inclusion revolutionary.

Western Union has a business network in over 200 countries and regions, many of which are developing countries facing currency instability issues. If stablecoin options are promoted, tens of millions of families relying on overseas remittances for their livelihoods will gain access to convenient dollar asset management tools for the first time. This is not only a business opportunity but also a fulfillment of social responsibility.

Payment giants are competing to layout stablecoin

Competitors of Western Union have also taken similar measures, indicating that stablecoins have become a battleground in the cross-border payments industry. Zelle's parent company, Early Warning Services, announced on Friday that stablecoins will be integrated into Zelle to facilitate cross-border transactions of funds in and out of the United States. Zelle is one of the largest real-time payment networks in the United States, with tens of millions of active users, and its inclusion will significantly expand the use cases for stablecoins.

At the same time, MoneyGram confirmed that it will soon launch its crypto application in Colombia, allowing locals to use Circle's USDC stablecoin for savings and almost instantly receive and transfer funds overseas. The choice of Colombia is no coincidence, as the country is one of the largest recipients of overseas remittances in Latin America, with total remittances exceeding $10 billion in 2024. Starting the pilot in Colombia can provide valuable practical experience for MoneyGram.

This competitive landscape is a significant benefit for consumers. When multiple remittance companies simultaneously launch stablecoin services, it will create price competition pressure, driving down fees and improving service quality. The fees for traditional cross-border remittances typically range from 5% to 10% of the transfer amount, while on-chain stablecoin transfers can theoretically reduce costs to below 1%.

Major Remittance Companies' Stablecoin Layout:

Western Union: Pilot on-chain settlement system, serving 150 million customers

Zelle (Early Warning Services): Integrating stablecoin to promote cross-border transactions in the United States

MoneyGram: Colombia launches USDC application, supporting savings and transfers

Common Trends: Reducing costs, speeding up, enhancing financial inclusion

The ultimate winner of this competition may not be a specific company, but the hundreds of millions of ordinary people around the world who rely on remittance services. Stablecoin technology is transforming once expensive, slow, and opaque cross-border remittances into fast, cheap, and traceable digital payments, which is one of the most direct positive impacts of fintech on the real economy.