Stablecoins are redefining remittances by offering faster, cheaper cross-border payments, coinciding with declining app downloads for traditional remittance giants like Western Union and MoneyGram.
According to Matthew Sigel, Head of Digital Assets Research at VanEck, app downloads for these industry leaders have dropped significantly—Western Union by 22% and MoneyGram by 27%. This decline extends beyond downloads, with monthly active users (MAU) remaining below 3 million since 2021. Between January and November 2024, user activity on these platforms steadily decreased, reflecting a clear shift in consumer preferences.
The Rise of Stablecoins
Sigel highlights the growing prominence of stablecoins as a transformative alternative to traditional remittance methods, offering faster, cheaper, and more accessible cross-border transactions.
Blockchain analysis firm Chainalysis reported that stablecoins, pegged to stable assets like the US dollar, are playing a crucial role in regions affected by currency instability or limited banking access. These digital assets are filling gaps left by traditional financial services, enabling individuals and businesses to make international payments, safeguard wealth from currency fluctuations, and manage liquidity effectively.
Unlike conventional banking, stablecoins facilitate instant transfers while avoiding the high fees and delays associated with older systems.
In 2024, the stablecoin market surpassed $200 billion in capitalization, marking a significant milestone. The sector also witnessed the emergence of innovative currencies like Ethena’s synthetic USDe stablecoin, challenging major players such as Tether (USDT) and Circle (USDC).
The profitability of the stablecoin industry is equally noteworthy. In December alone, issuers like Tether and Circle generated over $664 million in revenue—highlighting their dominance in the crypto protocol ecosystem.
Chainalysis further noted that stablecoins account for over 75% of the trillions of dollars in crypto transactions recorded in recent months. This exponential growth has drawn attention from traditional financial institutions and blockchain companies, including Ripple, which are exploring ways to capitalize on this burgeoning market.
A Path for Remittance Giants
Liz Bazurto, Ecosystem Engagement Manager for MetaMask, suggested that traditional remittance giants could integrate stablecoin payments into their operations. She stated:
“I can see a path for Western Union and MoneyGram to enable Stables. MoneyGram has enabled Stellar (USDC) for on and offramps.”
As stablecoins continue to disrupt the financial landscape, traditional remittance companies may need to adapt quickly to remain competitive.
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