DENVER / LONDON (IT BOLTWISE) – Western Union plans to modernize its remittance services through the use of stablecoins. This initiative aims to reduce dependence on traditional banking systems and improve the efficiency of capital use. The introduction of stablecoins could be particularly beneficial in countries with high inflation as they offer customers more control over their finances.
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Western Union, a leading financial services company, has announced that it will launch a pilot project for a stablecoin-based settlement system. The aim is to modernize remittance services for its over 150 million customers worldwide. According to CEO Devin McGranahan, the pilot aims to test the use of blockchain technology to process transactions to reduce reliance on traditional correspondent banks, shorten settlement times and improve capital efficiency.
The use of blockchain technology could offer significant advantages over traditional transfer methods. Western Union, which processes about 70 million transfers per quarter, sees blockchain technology as a way to move money faster, more transparently and more cost-effectively, without compromising compliance or customer trust. This innovation could be particularly beneficial for customers in over 200 countries suffering from high inflation rates.
The decision to integrate stablecoins comes just months after Western Union first hinted at plans to use stablecoins for cross-border transfers. McGranahan explained that the company initially steered away from cryptocurrencies due to concerns about volatility, regulatory uncertainties and customer protection. However, the passage of the GENIUS Act paved the way for this new direction.
Stablecoins could be particularly beneficial in countries with high inflation as they offer customers the opportunity to hold assets denominated in US dollars. This is particularly valuable because inflation and currency devaluation can quickly erode an individual’s purchasing power. These innovations fit well with Western Union’s broader strategy to modernize money transfers.
Western Union’s competitors have also taken similar steps. Early Warning Services, the parent company of payment platform Zelle, has announced that it will integrate stablecoins into Zelle to facilitate cross-border transactions. At the same time, MoneyGram has confirmed that it will soon launch its crypto app in Colombia, allowing users to save into Circle’s USDC stablecoin and transfer it abroad almost instantly.
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