Western Union Considers Jump Onto Stablecoin Bandwagon
Western Union is reportedly considering the launch of its own dollar-backed stablecoin.
[contact-form-7]The remittance company is facing competition from a growing swath of cryptocurrency-centered money movement operations, Bloomberg reported Tuesday (Aug. 12).
“We are exploring the opportunity for us to issue a stablecoin, particularly in non-U.S. markets,” CEO Devin McGranahan said, per the report, adding a coin could act “almost like a savings account in U.S. dollars” for customers in other countries whose regulators permit the activity.
The news comes weeks after the passage of the GENIUS Act, designed to make stablecoins part of the mainstream financial world. Since then, several other companies have begun to try to capitalize on digital assets, the report said.
Many of these projects promise to offer a less costly way to send money around the world, according to the report. The core business of 175-year-old Western Union is sending money overseas in transactions that can take days.
A stablecoin could help the company move away from this system, as other companies — including PayPal — try to use stablecoins to capture a piece of the cross-border transfer market, McGranahan said, per the report.
Western Union’s stock has fallen amid this increased competition, the report said. Analysts for Capstone wrote last week that the industry’s transformation could make Western Union a target for acquisition by a crypto company such as Circle.
“If someone came and offered us the appropriate value that we believe the company is worth, we obviously would entertain that,” McGranahan said when asked about acquisition talk, according to the report.
The company acknowledged the potential of stablecoins during its earnings presentation last month, saying it aims to use the technology to cut down on friction and float in cross-border transfers; allow for on-ramps and off-ramps for crypto-fiat conversions; lower its dependence on intermediaries; and bring crypto capabilities to its digital wallet.
“Last I checked, you couldn’t spend stablecoin if you wanted to buy a Coca-Cola, so converting stablecoins into fiat currencies, particularly in harder to convert currencies, is an opportunity for us,” McGranahan said in an earlier interview with Bloomberg.
PYMNTS wrote last week about the ability of stablecoins to address cross-border payment pain points by providing instantly settled transactions, reduced costs, programmable transfers and global accessibility.
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