Western Union Co is reportedly looking into launching its own dollar-backed stablecoin as more cryptocurrency projects challenge its long-standing role in moving money across borders.
“We are exploring the opportunity for us to issue a stablecoin, particularly in non-US markets,” Chief Executive Officer Devin McGranahan said in a recent interview. He said it could be “almost like a savings account in US dollars” for customers in countries where local rules allow it.
Why Sudden Urge for a Stablecoin?
This is coming just a few weeks after the U.S government passed laws aimed at bringing stablecoins into the financial mainstream. For remittance companies, this shift matters because many new projects promise to make sending money faster and cheaper.
Right now, Western Union sends money through partner banks in different countries, which can take two or three days to reach the receiver. McGranahan said that with a stablecoin, the process could be much faster and avoid using these traditional banking links.
Moreover, competitors are already jumping on the trend. For instance, PayPal has already launched its own dollar-backed coin and added it to its remittance service, Xoom. Circle, the company behind USDC, is expanding worldwide through deals with banks and fintech firms.
MoneyGram now lets customers send USDC and might soon start using stablecoins for internal operations. Remitly has rolled out a multi-currency wallet supporting both regular and digital money and teamed up with Bridge, which was recently bought by Stripe, to improve stablecoin use.
27% Drop in Share this Year
Meanwhile, Western Union’s market value has been under pressure, with shares dropping about 27% since January.
Analysts at Capstone recently suggested that industry changes might make Western Union an attractive purchase for a big crypto company like Circle, which went public in June. When asked about the idea, McGranahan responded, “If someone came and offered us the appropriate value that we believe the company is worth, we obviously would entertain that.”
If the company does go ahead, it may not build the token alone. McGranahan said Western Union is in talks with “most major players” in the crypto space about a possible partnership. The goal would be to give remittance recipients the option to keep money in a stable currency like the U.S. dollar, instead of having to exchange all of it for local money that may lose value quickly.
The CEO also said the stablecoin could help Western Union act as a bridge between digital finance and traditional banking by offering ways for people to move between the two worlds.
Also Read: Circle Unveils Arc, a Stablecoin-Centric Layer 1 Blockchain
