Western Union has been exploring the integration of stablecoins into cross-border transactions and digital wallet infrastructure as part of its strategy to diversify money movement methods.
The company is currently engaging with various stakeholders in the cryptocurrency ecosystem to facilitate the adoption of stablecoins through on- and off-ramps. This initiative supports Western Union’s goal of offering alternative channels for international remittances, especially in regions with volatile currencies.
According to company officials, stablecoins can be applied in three key areas: accelerating international money transfers, acting as a medium for converting between fiat and digital assets, and serving as a store of value in unstable economic environments.
US Regulatory Changes Drive Industry Focus
The renewed interest in stablecoin applications by Western Union aligns with recent regulatory developments in the United States. The GENIUS Act, which recently became law, establishes a federal licensing framework for stablecoin issuers requiring one-to-one asset reserves and prohibiting algorithmic stablecoins without real asset backing. The legislation also mandates AML compliance and provides senior creditor status to stablecoin holders in case of issuer insolvency.
A leading stablecoin issuer stated that the new law serves as a safeguard against the market dominance of large tech companies and traditional financial institutions, ensuring that any entity issuing stablecoins must operate independently, similar to crypto-native firms rather than through conventional banks.
Western Union has taken preliminary steps in this space by testing stablecoin-based settlement methods in Africa and South America. Additionally, the company filed trademark applications for related services in 2022. Earlier experiments with Ripple to test blockchain-based remittance settlements began as early as 2015 but have not progressed beyond a pilot phase. In 2018, Western Union confirmed it had no immediate plans to integrate crypto transfers into its core business offerings.
