Western Union and MoneyGram app usage drops as stablecoin adoption surges
Stablecoins are revolutionizing the way we send money across borders, offering a faster and cheaper alternative to traditional remittance methods. In a rapidly evolving financial landscape, traditional giants like Western Union and MoneyGram are struggling to keep up with the growing popularity of stablecoins.
According to Matthew Sigel, Head of Digital Assets Research at VanEck, the downloads of remittance giants’ apps have seen a significant decline. Western Union has experienced a 22% drop, while MoneyGram’s app downloads have decreased by 27%. This trend signifies a major shift in consumer behavior towards more efficient and cost-effective payment solutions.
Traditional Remittance App Decline (Source: X/ Mathew Sigel)
The decline in app downloads is not the only challenge for Western Union and MoneyGram. The number of monthly active users (MAU) on these platforms has remained stagnant at under 3 million since 2021. From January to November 2024, user activity on these platforms has steadily decreased, highlighting the increasing preference for stablecoins among consumers.
The rise of stablecoins has been propelled by their ability to offer fast, cheap, and accessible cross-border transactions. These digital assets, pegged to stable values like the US dollar, have become essential in regions with currency instability or limited access to reliable banking services. Blockchain analysis firm Chainalysis reports that stablecoins are filling the gaps left by traditional financial institutions, enabling individuals and businesses to make international payments, safeguard wealth from currency fluctuations, and manage liquidity efficiently.
Stablecoin On-chain Volume (Source: Chainalysis)
In 2024, the stablecoin market surpassed $200 billion in capitalization, marking a significant milestone in the industry’s growth. Innovative digital currencies like Ethena’s synthetic USDe stablecoin are now competing with established players such as Tether (USDT) and Circle (USDC). The profitability of the stablecoin sector is also notable, with issuers like Tether and Circle collectively earning over $664 million in December alone.
This rapid growth has caught the attention of traditional financial institutions and blockchain companies, including Ripple, which are exploring ways to enter the stablecoin market. Liz Bazurto, the ecosystem engagement manager for MetaMask, believes that traditional remittance giants like Western Union and MoneyGram may soon adopt stablecoin payments for their operations.
As stablecoin adoption continues to surge, the future of cross-border payments is set to be transformed by these innovative digital assets. Traditional remittance giants will need to adapt to this changing landscape to remain competitive in the evolving financial ecosystem.