Western Union and MoneyGram launch stablecoins as remittance fees come under pressure
Western Union and MoneyGram have each launched their own dollar-backed stablecoins and are expanding into digital wallets and cards, a bid to defend their remittance businesses as crypto-based transfers take hold.
Western Union released its USDPT token in May and later partnered with fintech Rain for a digital wallet and card. MoneyGram followed with MGUSD and a card launched in Colombia, since extended to El Salvador, with plans to widen availability across Latin America. "They don't say they want stablecoins. What they want is the ability to hold their funds in a stable currency, like the US dollar," said Anthony Soohoo, MoneyGram's chief executive.
The stakes are visible in the numbers. Total stablecoin payments reached at least $401 billion in the first eight months of 2026, up 42 per cent on the year, according to consultancy Alvarez & Marsal. Cross-border stablecoin volume rose 64 per cent in 2025 to $135 billion. Remittance fees worldwide have stayed above 6 per cent for a decade, and Kumanan Ramanathan, a managing director and co-head of crypto at Alvarez & Marsal, said that is the margin now under pressure.
The pressure on the incumbents is financial as well as technological. Western Union shares trade near a record low after falling 70 per cent in five years, while a MoneyGram loan was quoted at about 71 cents on the dollar on Friday 16 October. Monthly active users of Western Union's app fell 10 per cent in September from a year earlier and MoneyGram's dropped 9 per cent, while Wise Group's rose 9 per cent, according to Sensor Tower. Western Union's chief financial officer, Matt Cagwin, said on a 30 July earnings call that new migrants are "the lifeblood of our retail business".
Not everyone is convinced the shift will be quick. Ismail Ahmed, founder of WorldRemit and now head of the finance app Odola, said the remittance industry has repeatedly overestimated digitalisation, and that most Western Union transactions remain cash years after the shift began. Paul Bances, a strategic adviser at TGB Advisory Group, warned that a proliferation of non-interoperable stablecoins could recreate the fragmentation the industry already knows. Western Union said fees and delivery times depend on the countries involved, payment methods and the amount sent, and that customers are told the applicable charges before a transaction is completed.
What it means for Pakistan: Pakistan is one of the world's largest remittance recipients, and the corridor economics described here apply directly: workers sending money home from the Gulf, the United States and Europe pay a share of each transfer in fees, and a cheaper stablecoin route could put pressure on banks and exchange companies that handle those flows. The State Bank of Pakistan has been studying digital assets, and PVARA's licensing framework for virtual asset service providers will shape whether stablecoin-based remittance channels can operate legally in the country. For now, the source gives no Pakistani figures, and no Pakistani regulator has commented on these developments.
