Have you seen Western Union (WU) stock lately?
It’s shed 70% of its value since 2021. If financial destruction had a chart…
Western Union was the way to send money abroad. Millions of migrant workers used it every month to wire hard-earned cash home to their families.
Walk to a kiosk, fill out a form, pay a hefty fee, and hope the money arrived a few days later.
But Western Union has fallen prey to a simple, yet powerful, innovation in crypto…
I regularly make international wire transfers. “Painful” is how I’d describe dealing with banks.
You have to fill out pages of paperwork, pay $30, and sometimes need to call the bank to send money.
When a customer experience sucks for that long, it usually means one thing: The business model is ripe for disruption.
Stablecoins make sending money better, faster, and cheaper.
A stablecoin is a digital token pegged to a real-world currency, most commonly the US dollar.
These digital dollars can be sent anywhere on Earth, 24/7/365. No banks. No middlemen. It’s finance at internet speed.
Stablecoins are the only way to send $10,000 halfway around the world in seconds from your phone for less than a penny.
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Banks mostly work in the West. That can’t be said for countries like Argentina, where my wife and I used to live.
Locals would sprint to convert their pesos into US dollars the minute they got paid. After being burned by inflation too many times, they lined up at “cuevas” (black-market exchanges) to swap pesos for cash dollars.
Now, they just open an app and buy digital dollars. More specifically, they use crypto rails to convert their worthless pesos to stablecoins.
They’re like having a US dollar bank account in the cloud.
Folks often talk about crypto replacing the US dollar. If anything, stablecoins strengthen the dollar’s dominance. But I’m certain they’ll replace the 100+ worthless currencies around the world.
In Bolivia, some grocery stores already show prices in USDT, the most popular stablecoin.
Source: @paoloardoino on X
In 2024, stablecoin payments hit $14 trillion, surpassing Visa’s (V) $13 trillion for the first time ever:
Source: Binance
A crypto technology that didn’t exist a decade ago is now moving more money than the world’s largest payment network.
There are already $300 billion worth of stablecoins circulating globally. And now, the biggest names in finance and tech are getting in…
Stripe just rolled out a product that lets any business send or receive stablecoins with a click. A coffee shop in Lisbon can now pay a supplier in Manila in seconds. Sending dollars is now as easy as sending an email.
SpaceX has quietly accepted stablecoin payments for years.
Visa is using stablecoins like USDC to settle payments between partners faster and cheaper than traditional rails.
And North Dakota just announced plans to follow Wyoming to become the second US state to issue its own stablecoin.
The path to $1 trillion is clear.
Washington finally said “yes.”
Congress recently passed the GENIUS Act. It’s America’s first dedicated stablecoin law. It gives issuers regulatory clarity. More important, it invites the big players like banks, fintechs, and major corporations to join the game.
It’s the green light stablecoins have been waiting for to move from the fringes into the mainstream.
One big loser from this is Western Union.
Today, migrant workers send about $150 billion a year home and lose a big chunk to fees from middlemen. With stablecoins, that cost drops to near zero, and the money is sent instantly.
Mark my words: WU is going out of business. Maybe that’s obvious. Less obvious is the fact that stablecoins are going to disrupt “fintech” companies like PayPal Holdings (PYPL), too.
PayPal still runs on old banking rail that charge fees, delay settlement, and don’t work on weekends.
Stablecoins move money instantly, 24/7/365, and for nearly free. PayPal’s closed network looks like a toll road next to a free highway.
Don’t chase stablecoin issuers like Circle (CRCL).
Margins are already razor thin. And competition is about to explode as giants like Stripe, Google (GOOGL), and Amazon (AMZN) enter the game.
The real winners are the rails—the infrastructure that makes all this possible.
There’s roughly $300 billion worth of stablecoins in circulation today.
Over 60% of these transactions happen on Ethereum’s (ETH) blockchain and its Layer 2 networks:
Source: rwa.xyz
Each time you use Ethereum’s blockchain, you pay a fee.
Over the past two years, stablecoin transactions alone have generated $288 million in revenue for Ethereum.
Now that stablecoins are legal and volumes continue their steady march higher, expect revenue from fees to surge. That’s great for Ethereum and Ethereum holders, who can earn a slice of these fees by staking their tokens.
Stephen McBride
Chief Analyst, RiskHedge
PS: Stablecoins are just one part of the much larger tokenization trend that’s reshaping financial markets, where everything from dollars to real estate will move on-chain.
In my RiskHedge Venture advisory, I break down exactly how this transformation is unfolding—and which five cryptos are powering it—in a report called, “The Rise of Institutional Crypto: 5 Coins Powering the Tokenization Trend.”
If you’d like to read this report and also see the full portfolio, sign up for RiskHedge Venture here. You’ll gain automatic access once you join. And you’ll find the tokenization report with my five picks in your Members’ Area.