Western Union Targets High-Inflation Markets With ‘Stable Card’

Speaking at the UBS Global Technology and AI conference last week, Western Union chief financial officer Matthew Cagwin said the initiative would help preserve the value of remittances by acting as a stable alternative to rapidly depreciating local currencies.

“Imagine a world where your family in the US is sending you $500 home, but by the time you spend it in the next month, it’s only worth $300,” said Cagwin, citing Argentina as a prime example of a country with inflation over 30%.

“We can see a good utility for our stable card there, which is an increment to our prepaid card we have today here in the US.”

Tackling Inflation With Stablecoins

The company is also developing its own crypto token and leveraging its presence in 200 countries to create distribution advantages over typical crypto projects.

This initiative is part of a broader digital asset strategy that includes its Digital Asset Network infrastructure connecting to on/off-ramp providers and stablecoin settlements.

“We think that we can make a market for our coin in those markets, and we wanted to be able to control the economics, control the compliance, and control the overall distribution, and we think we can grow that beyond that,” Cagwin said.

Western Union announced its plan to launch US dollar Payment Token (USDPT), its new stablecoin, in late October. It also announced a Solana-based “Digital Asset Network designed to bridge the digital and fiat worlds.”

“As we evolve into the digital assets space, Western Union’s USDPT will allow us to own the economics linked to stablecoins,” said Devin McGranahan, President and CEO of Western Union at the time.

Inflation Soars In These Countries

Venezuela has the highest inflation in the world at 172%, according to Trading Economics. South Sudan also has triple-figure inflation.

Iran, Haiti, Argentina, and Turkiye all have extreme inflation, ranging from 30% to 45%. Inflation also remains persistently high in many developed countries, such as the UK, Russia, Austria, and Australia, following the pandemic lockdowns.

Another problem is that government and central bank inflation figures are often undermeasured and rarely reflect reality. They do not include day-to-day expenses such as groceries and energy bills, which are constantly increasing in most countries.