Western Union’s Solana-based stablecoin could reshape its payment model, analyst says

Western Union's new Solana-based stablecoin, USDPT, may do more than speed up money transfers. It could also weaken the old lines between remittances, consumer payments and bank settlement, according to Angus Scott, founder of the Solana Research Institute, a Solana Foundation-backed body.

Western Union launched the U.S. dollar-backed stablecoin issued by Anchorage Digital Bank N.A. on Monday. The company said the token will support 24/7 settlement with agents and partners across its global payment network. The launch follows Western Union's April disclosure that USDPT would initially replace SWIFT-based interbank settlement with its agents.

Scott told CoinDesk the launch is another sign that stablecoins are starting to challenge older payment models.

"Western Union's adoption of Solana-based stablecoins is another point of proof that stablecoins are becoming highly disruptive to traditional payments business models," Scott said.

The key point, he added, is that Solana can handle both small consumer payments and large settlement flows. Low fees make it possible to use a stablecoin for small purchases, and fast settlement, coupled with 24/7 operations, can also help firms move money between agents without waiting for correspondent banks.

Scott said that could let Western Union pool idle balances and manage cash across its network in real time. Businesses that accept USDPT could do the same with customer payments.

"The Western Union model appears to be breaking down the barriers between remittances, payments and wholesale settlements via correspondent banks," Scott said. "How this plays out will be one of the key themes of the next few years."