Written by: Stablecoin Blueprint
Translated by: Deep Tide TechFlow
On July 22, Western Union seemed to welcome a long-awaited dawn. After its CEO mentioned in a Bloomberg interview that the company would deeply explore the field of stablecoins, the stock price of this traditional payment giant quickly soared, closing up nearly 10% that day, attracting a long-lost 'bottom-fishing' frenzy among investors. However, this hope was fleeting. A week later, Western Union's financial report again fell short of analysts' expectations, and the stock price subsequently retreated to a low point, completely erasing earlier gains.
This brief market excitement is not only about Western Union but also reflects Wall Street's new preference for stablecoins. In the context of the passing of the landmark genius bill and the astonishing fivefold rise in the stock price of stablecoin issuer Circle, investors have almost developed a reflex: rushing to anything 'stablecoin.' However, this enthusiasm for 'stablecoins' is more a misunderstanding of a buzzword than a real business strategy. Stablecoins cannot save Western Union's core business, but if the company can take the right actions, it might open a new future.
The Decline of Giants
Founded in 1851, Western Union was once a giant in the global remittance space, but its financial performance tells the story of a giant struggling in a new era. In recent years, Wall Street has viewed this world's largest remittance company as a 'melting iceberg,' and data supports this view: since 2021, the company's revenue has shrunk from over $5 billion to an expected $4.1 billion in 2025, while its market share has been steadily eroded by digital-first competitors. This decline is also reflected in its stock price—falling from a peak of $26 in 2021 to now hovering between $8 and $9.
The foundational strength supporting this 172-year-old giant—its network of nearly 400,000 physical agent locations—has now become its biggest structural weakness. This reliance on agents is costly, accounting for about 60% of Western Union's service costs. This network primarily serves a key customer group: cash-dependent immigrants who often lack access to banking services. For decades, this model has been Western Union's moat.
However, as the global digitalization process accelerates, this cash-dependent customer base is in long-term structural decline. In the digital arena—the battlefield of the future—Western Union's performance lags far behind its competitors. In the last quarter, digital revenue from the Western Union brand grew only 6%, while competitors like Wise and Remitly saw growth rates of 20%-30% or even higher. Once the undisputed king of the remittance field, it is now losing ground in the digital domain.
An attractive yet flawed solution
On the surface, Western Union's proposed stablecoin plan seems quite comprehensive. In a recent earnings call, the company outlined four key strategies:
Improve its financial management;
Achieve global payments through stablecoins;
Provide buying, selling, and holding functions within digital wallets;
Most importantly, use its global network as an entry and exit point for the crypto ecosystem.
However, the company's current focus is clearly on the first strategy. As CEO Devin McGranahan stated, 'We spend most of our time and energy in this area,' namely solving backend operational efficiency issues through stablecoins.
The appeal of this strategy is undeniable. McGranahan emphasized that stablecoins can 'significantly enhance settlement speed and reduce the prepayment amounts required by partners.' He cited a recent liquidity crunch in India that caused payment delays, while stablecoins could provide real-time liquidity replenishment, offering services around the clock and significantly improving customer experience.
However, while optimizing financial management through stablecoins is a wise goal, it cannot bring long-term competitive advantages. Western Union's main competitors, such as MoneyGram and Remitly, have already implemented similar stablecoin-based settlement strategies. Any cost savings may be eroded under competitive pressure, especially against digital companies with lower operational costs. This renders this potential innovation a mere 'business operational cost' that cannot reverse the company's current structural decline.
Source: FXC Intelligence
The real opportunity: A cash bridge to the digital economy
The future of Western Union does not lie in trying to catch up with competitors in the digital space, but in becoming a role that they cannot replace: the primary access layer for cash to stablecoin globally. The company should fully leverage its 400,000 physical agent locations, viewing them as its most important strategic asset. By strengthening this network and relying on its well-trusted brand, Western Union is poised to address a critical financial infrastructure issue: providing seamless connections between physical cash and the global digital economy, a service that many emerging markets desperately need.
This strategic transformation can be achieved in two ways. First, through owned traffic.
Western Union can directly integrate the cash-to-stablecoin conversion feature into its highly-rated mobile app. Users can walk into a trusted Western Union agent location, deliver volatile local currency, and have US dollar stablecoins deposited into their digital wallets within minutes. This is an extremely attractive solution for those looking to protect their wealth with US dollar stablecoins, especially for those living in areas with volatile currencies.
A second, more powerful method is through platform traffic.
A more potential way is to open its agent network to third-party wallets and fintech companies through APIs. These partners can directly embed buttons in their applications for 'Pay with Western Union' or 'Withdraw through Western Union.' The market demand for this has already emerged. McGranahan revealed during the company's earnings call that they were surprised by the 'unexpected high demand' for deposit and withdrawal services. This approach transforms Western Union from a closed remittance service into an open infrastructure, becoming a critical 'last mile' connection between the rapidly growing digital ecosystem and the physical world.
With just deposit and withdrawal services, Western Union can achieve considerable financial returns. Based on current fee rates and the agent economic model (considering its pricing power in cash transactions), just $1 billion in deposit/withdrawal transaction volume could bring about $80 million in operating profit, a significant boost compared to the company's current total profit of about $800 million. In comparison, digital competitor Remitly saw transaction volume increase by $5 billion in the most recent quarter compared to last year.
In addition to transaction fees, Western Union can also offer more financial services through its digital wallet touchpoint, such as debit cards for online purchases, credit products, and savings and investment services. Western Union is even considering issuing its own stablecoin, which, combined with its extensive cash deposit/withdrawal network, would create an attractive service combination and convenient distribution channel. More importantly, unlike Western consumers, target users of these services are less sensitive to interest rates, which may allow Western Union to retain more earnings.
These new features will fundamentally redefine the role of Western Union agents. Agent points will no longer just be a place to collect one-time remittances but will become efficient banking outlets in the digital age. For millions of unbanked or underbanked individuals, local agents of Western Union will become a physical bridge to global digital wallets, ultimately fulfilling the promise of 'providing banking services to the unbanked.'
Necessary transformation, full of risks
This strategic transformation is fraught with challenges, from the significant execution risks faced by a 172-year-old company to the long-term decline in cash usage and the threat posed by informal P2P networks. However, it is precisely the structural decline of its core business that makes this transformation all the more necessary.
While defending its traditional business, Western Union urgently needs to inject new growth momentum into the company through deposit/withdrawal strategies. This strategy not only allows the company to participate more deeply in the rapidly expanding digital asset economy but also leverages its global physical network as a powerful differentiator, buying valuable time to become the indispensable cash bridge of the future—provided it can execute successfully.
Western Union recently announced a $500 million acquisition of Intermex, a company focused on cash remittance operations in Latin America, indicating the company's preference for leveraging synergies from declining businesses and converting low-cost acquired users into digital users. While acquisitions may consume significant time and energy, becoming another major risk hindering Western Union's transformation, the new retail locations could also become strategic assets that align with its future potential role as a cash bridge.
Conclusion
The future of Western Union cannot be assured through mere tweaks to its old business model with new technologies. The strategic choices are now clear: either continue to fight defensively under the rules set by digital-first competitors or decisively transform into an indispensable cash bridge connecting the physical world with the rapidly developing digital asset economy. Stablecoins cannot save the traditional remittance economy, but they are the key to unlocking the future platform economy. One path leads to an elegant conclusion; the other leads to a new meaning of existence.