Traditional money transfer giants like Western Union and MoneyGram are struggling to keep pace in an evolving financial ecosystem increasingly shaped by stablecoins.
According to Matthew Sigel, head of digital wealth research at VanEck, downloads of major money transfer apps are down significantly, with Western Union down 22% and MoneyGram down 27%.
On the other hand, this decline is not limited to app downloads. The number of monthly active users (MAUs) on these platforms has remained below 3 million since 2021. From January to November 2024, these platforms faced a steady decline in user activity, indicating a shift in consumer behavior.
Rise of stablecoins
Siegel suggested that stablecoins are emerging as a powerful alternative to traditional money transfer methods by offering faster, cheaper and more accessible cross-border transactions.
These digital assets, which are pegged to stable values like the US dollar, are essential in regions facing currency instability and limited access to reliable banking systems, according to a report by blockchain analysis firm Chainalysis. It has become a thing.
Stablecoins continue to gain popularity globally as they fill the gap left by traditional financial services. Individuals and businesses use stablecoins for international payments to protect their wealth from currency fluctuations and efficiently manage liquidity.
Unlike traditional banks, stablecoins enable instant transfers, avoiding the delays and high fees associated with older systems.
In 2024, the stablecoin market reached a milestone with a market capitalization of over $200 billion. The sector has also seen the rise of innovative digital currencies such as Ethena’s synthetic USDe stablecoin, which now competes with larger players such as Tether (USDT) and Circle (USDC).
Furthermore, the profitability of the stablecoin industry is equally noteworthy, with issuers such as Tether and Circle generating combined revenue of over $664 million in December of last year, which was generated by crypto protocols. The company accounts for a significant portion of its revenue.
Furthermore, Chainalysis pointed out that over 75% of the cryptocurrency transactions recorded in recent months were in stablecoins.
This impressive growth has attracted attention from traditional financial institutions and blockchain companies, including Ripple, who are looking for ways to take advantage of this burgeoning market.
With this in mind, MetaMask Ecosystem Engagement Manager Liz Bazurto said traditional money transfer giants may adopt stablecoin payments for their operations. she said:
“We see a path forward for Western Union and MoneyGram to enable Stables. MoneyGram has enabled Stellar (USDC) on on- and off-ramps.”
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