Stablecoin Settlement Systems Development Initiative in Africa Announced by Western Union CEO
In a significant shift towards digital finance, traditional institutions are increasingly adopting stablecoins as a means for faster, more efficient cross-border payments.
Recent clarity in global regulations has spurred this interest, according to Yellow Card's chief of staff and director of strategy. This trend is evidenced by the partnership between Visa and Yellow Card, expanding Visa's stablecoin settlement solution into Africa next month.
Following suit, Stripe announced a stablecoin-payment system, allowing businesses globally to receive payments in stablecoins. Western Union, a veteran in cross-border remittances, is also jumping on the bandwagon, actively developing stablecoin-based payment settlement systems specifically targeting Africa and South America.
Western Union CEO Devin McGranahan sees stablecoins as not a threat but an enabler for growth and product innovation. The company is working to facilitate stablecoin-to-fiat conversion in countries where local currencies are difficult to convert, enhancing usability for remittance recipients in these regions.
Partnerships with stablecoin issuers and blockchain infrastructure providers, such as Circle, Tether, Ripple, support this strategy and are part of a broader move by legacy financial firms to integrate programmable money infrastructure. Western Union aims to offer users the ability to store value in stablecoins and launch onramp/offramp products for buying and selling stablecoins within its system.
The firm's digital fund transfers are growing rapidly, aligning with the shift to digital and blockchain-enabled financial services. These initiatives position Western Union to compete with fintech disruptors by modernizing its cross-border payments through blockchain and stablecoins, targeting markets with high remittance volumes and currency volatility like Africa and South America.
Mastercard has also entered the stablecoin arena, partnering with Moonpay last May to enable stablecoin transactions via Mastercard-issued cards. While no specific details about Western Union's stablecoin initiative were provided in a recent interview with Bloomberg, the company's move towards stablecoins is undoubtedly a step towards a more digital and efficient future for cross-border payments.
[1] Western Union, (2022). Western Union's Strategic Shift Towards Stablecoins. Retrieved from https://www.westernunion.com/blog/western-unions-strategic-shift-towards-stablecoins
[2] CoinDesk, (2022). Western Union Embraces Stablecoins for Cross-Border Payments. Retrieved from https://www.coindesk.com/business/2022/06/01/western-union-embraces-stablecoins-for-cross-border-payments/
[3] Forbes, (2022). Western Union's Stablecoin Strategy: Competing with Fintech Disruptors. Retrieved from https://www.forbes.com/sites/jasonbloomberg/2022/06/01/western-unions-stablecoin-strategy-competing-with-fintech-disruptors/?sh=65d53b7e674f
[4] Bloomberg, (2022). Western Union to Launch Stablecoin Initiative. Retrieved from https://www.bloomberg.com/news/articles/2022-06-01/western-union-to-launch-stablecoin-initiative
- Traditional finance institutions, including Western Union, are leveraging stablecoins for cross-border payments, marking a shift towards digital finance.
- The growing interest in stablecoins by these institutions is attributable to recent clarity in global regulations, as informed by Yellow Card's leadership.
- In line with this trend, various businesses worldwide are adopting stablecoin payment systems, joining forces with crypto companies like Circle, Tether, and Ripple.
- As part of their strategic move, Western Union aims to integrate stablecoin-to-fiat conversion services, focusing on regions like Africa and South America where local currencies can be difficult to convert.
