Western Union has explored the potential of stablecoins for cross-border transactions and digital wallet infrastructure as part of its strategy to find alternative settlement methods.

In discussions with key players in the cryptocurrency sector, Western Union is considering supporting on- and off-ramps for stablecoin usage. This effort aligns with the company’s goal of creating new channels for money movement, especially in regions experiencing currency volatility.

Stablecoins could be employed in three primary areas: enhancing international transfer speed, facilitating conversions between fiat and digital assets, and serving as a store of value during periods of economic instability.

Regulatory Developments Impact the Industry

The renewed focus on stablecoin applications by Western Union coincides with recent regulatory changes in the United States. The GENIUS Act, signed into law recently, introduces a federal licensing framework for stablecoin issuers and mandates one-to-one asset reserves.

According to officials from a major stablecoin issuer, this new legislation serves as a guardrail against market dominance by large tech companies and traditional financial institutions. The regulation requires any entity issuing stablecoins to establish an independent structure akin to crypto-native firms, rather than relying on conventional bank operations.

Western Union has taken previous steps in the crypto sector by testing stablecoin-based settlement systems in Africa and South America. In 2022, it filed trademark applications for crypto-related services. The firm’s earlier collaboration with Ripple to test blockchain-based remittance settlements dates back to 2015 but did not advance beyond a pilot stage.