Western Union has considered the use of stablecoins for cross-border transactions and digital wallet infrastructure, as part of its exploration of new settlement methods.
According to company officials, the firm is also in discussions with cryptocurrency sector players to support on- and off-ramps for stablecoin usage. The initiative aligns with Western Union’s aim to develop alternative channels for money movement, particularly in regions with volatile currencies.
Officials noted that stablecoins could be applied in three core areas: faster international money transfers, a medium for converting between fiat and digital assets, and a potential store of value in economies facing currency instability.
Regulatory shift in the US brings renewed industry focus
The company’s increased interest in stablecoin applications coincides with recent regulatory developments in the United States. The Government Evaluation of New Innovations in the US (GENIUS) Act, signed into law, introduces a federal licensing framework for stablecoin issuers. The legislation mandates one-to-one asset reserves, outlaws algorithmic stablecoins not backed by real assets, and subjects issuers to standard Anti-Money Laundering (AML) rules. It also grants stablecoin holders senior creditor status in the event of issuer insolvency.
Officials at a major stablecoin issuer described the new law as a guardrail against the market dominance of large tech companies and traditional financial institutions. They said the regulation ensures that any entity looking to issue stablecoins must establish an independent structure similar to existing crypto-native firms, rather than operate under the umbrella of a conventional bank.
Western Union, which has previously taken steps in the crypto sector, began testing stablecoin-based settlement in Africa and South America. The firm also filed trademark applications for crypto-related services in 2022. Its earlier work with Ripple to test blockchain-based remittance settlements dates back to 2015, though this initiative has not moved beyond the pilot stage. A 2018 statement from the company confirmed that it had no plans at the time to incorporate crypto transfers into its core offerings.
