Western Union’s Stablecoin Moment

Presented by Rain.

This episode of Crossing the Chasm, host Chiara Munaretto is joined by Malcolm Clarke to discuss how Western Union is bringing stablecoins into the real world with the launch of USDPT. Malcolm explains why Western Union believes the future of digital dollars is not about making consumers learn crypto, but about using blockchain behind the scenes to make cross-border payments faster, more efficient, and easier to scale.

Chiara and Malcolm dig into the infrastructure challenges that still define global remittances, from liquidity and settlement timing to the need for reliable fiat off-ramps, and how USDPT can help reduce that friction. They also explore Western Union’s stablecoin-backed card experience, flexible custody options, interoperability across chains, and why trust and practical utility will be the deciding factors in bringing stablecoins to everyday users.

Subscribe for more conversations on what it actually takes to bring tokenized money into the real world.

Connect with the Host

Chiara Munaretto: https://www.linkedin.com/in/chiaramunaretto/

About Crossing the Chasm

Crossing the Chasm is a special series with Rain focused on what it actually takes for stablecoins to become the default for everyday payments. Instead of rehashing benefits or highlighting pilots, the series breaks down the real work behind winning on Main Street, from upgrading payment rails and navigating regulation to embedding stablecoins into products people already use. Through conversations with builders and operators, we explore how tokenized money moves from early adoption to practical, widespread use across businesses and consumers.

Transcript

Intro

Rain 0:00

RAIN helps any business begin using stablecoins for payments and card programs. Stablecoins are transforming payments around the world. The question is how to get started with maximum impact and minimum effort. That's where most teams get stuck. RAIN gives you a way in. With a single integration, businesses can launch stablecoin-powered card programs and payment solutions. Rain handles the on-and-off ramps, infrastructure, and compliance behind the scenes. Your users get the same familiar experience they trust, and your business gets the benefit of lower fees, faster settlement, and new revenue streams. If stable coins are on your roadmap, you're closer than you think. Learn more at Rain.xyz.

Malcolm Clarke 0:39

You're really not coming to market with a, hey, we have this great stable crypto player. Consumers don't understand that. They understand trust, they understand certainty, they understand cost, and they understand can I spend and get my money quickly.

Chiara Munaretto 1:02

This is the show where institutional finance meets stablecoin adoption. I'm Keramesto, co-founder of Stablecoin Insider and host of today's podcast. Today's conversation is actually one that I've been uh generally looking forward because we're not just talking about uh crypto-native startup starting to experimenting with stable coins, but we're talking about uh Western Union, really uh 170 plus years old money movement company. And I'm really happy to have you, Malcolm, here.

Malcolm Clarke 1:32

Hi, it's great to meet you. And um I think yesterday was our 175th birthday as Western Union.

Chiara Munaretto 1:37

Wow, then we are actually like immediately celebrating the anniversary.

Malcolm Clarke 1:42

Yes, and uh yeah, very interesting anniversary for sure. But yeah, happy to be here and great to meet you.

Chiara Munaretto 1:47

Yeah, likewise. I think like really just to get started, I think it would be really, really interesting to understand a little bit better what Western Union is and what is exactly your role within the company.

Why Western Union Launches USDPT

Malcolm Clarke 1:59

Yeah, absolutely. So Western Union, as we said, is a 175-year-old money remittance company and now turning into a modern payment platform. So my role at Western Union, I run the digital assets team. Um, I'm launching the USDP stablecoin and stable card. I'm very excited to be working with a great team here to bring those things to market in the very, very near term.

Chiara Munaretto 2:25

Yeah, and when it comes down to the USDPT, but also like the digital asset network itself, how would you explain it and why Western Union you think is like the best player to take this role in uh in the market?

Malcolm Clarke 2:37

Yeah, it's a great question. So I think you you have to go to the core of what we do at Western Union and why we're um you know an interesting player in the market. So Western Union, you know, we move hundreds of billions of dollars a year around the globe. So we do that through Treasury, we do it through the correspondent banking layer. And then on the opposite side of that is our you know over 100 million customers that you know that money they receive and they they spend um either going through retail or through our current wallet infrastructures. So there is a cost and operational inefficiency with the banking platform that has been well spoken about. So stable coins is a very natural um compliant way to remove some of that inefficiency on the economic side of within the treasury moving away from that correspondent banking layer. And then on the opposite side of that for the consumer, in certain regions, holding US denominate dollar-denominated coins or holding Euro denominated coins actually helps offset some of the effects and economic challenges they have in certain regions. So there is a market need for not just fast payments and fast money movement, but unlocking use cases of holding and you know protecting from effects and various things for consumers. So Western Union is well positioned because we don't just have the economic scale of a large treasury unit where we can make optimizations and savings. We have a large customer base and then a large retail footprint, you know, closed for 500,000 stores, that last count, that really do benefit from moving instant funding but holding digital denominated coins. I think as we get into the conversation, some of the bigger benefits come. You know, for the first time in history, Western Union has a programmable asset, so a piece of money that we can now program. So it really unlocks potential future use cases around loyalty. And I don't mean yield holding, I mean true loyalty where you know using services or gaining more for using Western Union or partners and other future use cases with new partners. So you have this programmable capability now with money that previously we didn't have, and really engagement to customers and how they live and how we move that money is very important to us and them. So it just unlocks all of that for us as Western Union. So that's one of the key strategic reasons for doing it. You know, economics are great as well. So it lines up very well for Western Union.

Chiara Munaretto 5:07

And if we had to make like a parallelism on how Western Union is working right now and all the different value chains, different customer segments that it touches, the moment that the stable coin is going to be live and enter within uh Western Union Rails, what is exactly going to change? Do you have uh already a plan on how it will touch upon the different customer segments and how would that look like in practice?

Treasury Use Case And Prefunding

Malcolm Clarke 5:32

Yeah, so I mean at Western Union uh we decided that we were gonna attack this from four different angles and segments. So obviously we have a stable coin, which is the US dollar payment token or USDPT. That will go into the exchanges, will go into the general coin markets, and that will be the underpinning digital asset that will run the three other programs. So the other programs which are are critical to this in the first segment is our treasury and internal corporate partnerships. So today, as I mentioned, we move over $100 billion globally. We move that between what we call agents. So agents are our stores or they're corporates that have corporate stores, or they're our own agents. So there's a big marketplace which is very diverse. Um, so the first use case in the first segment is that. So it's really saying how do we remove some of the cost of the corresponding banking layer? How do we remove our requirement to pre-fund? So I'll explain what that means. So, in use case terms, um the corresponding banking layers generally work nine to five Monday to Friday, as we know. Um, so we have an organizational action that looks at saying, okay, how do we fund our agents that are giving out cash from their drawers on weekends and holidays? So we do what's called capital prefunding. So we will move a set of capital through the correspondent banking layer in advance that will sit locally, and those agents will draw from that. So there's a capital cost of that. So the first use case and the first group we unlock is really our internal treasury teams, our internal liquidity and capital funding, and that has a net positive to us in terms of cost. So that operational savings for the agents and for our treasury partners, that means we have a more instant funding mechanism. So if they're running out of funding or they're hitting limits or they need to send money back, they can do that in the same way that we send it and remove some of that optimization, operational cost, and optimize those followers. So our first demographic and first user starts with internal treasury and business to business, business to corporate.

Chiara Munaretto 7:43

So let's maybe uh pause just one uh just one second here. Um, because of course you're gonna you're in touch with all these different uh corporates and different treasury departments. So, how does the implementation look like from their side? So, what is required on their side? Are they like will they change their habits? Will they just see um uh a faster settlement? What is really uh the change that is gonna happen and what is required on their side?

Agent Wallets And Off Ramps

Malcolm Clarke 8:10

Yeah, no, that's a that's a great question. So again, it's a very diverse marketplace of different types of agents. So the requirement for them is to be have a crypto-based wallet. So, Western Union, we have an agent wallet for agents that will take part in this, where we will issue them a non-custodial wallet that will sit within their ecosystem so that we can do the fund settlement back and forth. So it was part of that non-custodial wallet, and this is where it gets very interesting for those agents. They're able to then take that USDPT and exit through the local banking rails, through the exchange partnerships, and through the local partnerships we're putting in place for liquidity, so that they can turn the USDPT into a fiat-denominated local value so they can continue with their normal business. So for those agents, what really changes is just a different interface to the banking layer and a different cost level. So it's instant to them, they can send it back instantly, and then they exit through the ways that they would today. So the integrations to their local ecosystems will be there. The other key thing that changes for them is they now have so some agents are already crypto native in certain certain regions. So they're already doing this today, they're already settling in coins. So for them, they're able to take those US dollar-denominated tokens of USDPT and hold them, um, put them into the crypto space, do other things with them, especially at the lower agent levels, that you know, they would have to flip dollars into crypto. So there's an assumption that agents are not already crypto native. For certain countries, they really are. So where we launch first are those crypto native countries where we have crypto native agents, they already have exit rails, they already have FX Rails, already doing this. And then, you know, this is a program that will continue for a long, long time, and we will eventually move downstream to the rest of the agents and you know help them become crypto native.

Chiara Munaretto 10:06

And from the you mentioned that uh the wallet is going to be non-custodial. So of course they're not used to this. Uh, will you eventually partner up with uh a custody partner? Will they have to? How do you uh basically fix this gap on the custody side?

Malcolm Clarke 10:22

Yeah, so I think again, it it's dependent on the agent. So while we are a non-custodial wallet, if an agent has a wallet infrastructure, a custodial wallet infrastructure or non-custodial wallet partnership, then they can bring those wallets. Like we're an open network on Solana, we have an open coin programmed on Solana. So that gives us the ability to be flexible to meet what those agents and those treasury partners need. Some of the bigger treasury partners, they have CoinDesks today, they have liquidity desks, they will go directly in and they can mint and burn directly within our ecosystem and bring it into that custody. So you have to support both and you have to be flexible to both. And that's the intent when serving those users.

Chiara Munaretto 11:07

Yeah. And uh moving on with the second uh customer group?

Consumer Stable Card In 40 Markets

Malcolm Clarke 11:12

Yeah, so the second customer group, let's talk about the consumers because they're the they're the they're the group that are going to be the ones that benefit the most here. Um so for consumers, the Western Union consumer, if you take a really broad general view, you know, they move money between themselves and family members. Their movement of money, they don't, they're not really interested in whether it's a stable coin or fear or something else. They just want to move money at speed with certainty and know what the cost of that money movement is going to be, and then know that the person on the other end has received it. So you take that as your first premise. So that customer group, you're looking at creating utility that allows them to access this very quickly as part of their current flow. So the first launch in this space for us is a stable card. So the stable card is backed by the USDPT coin and that will be launched, you know, again, very shortly into plus 40 markets globally. So that stable card is natural in the flow. So what that means is today, if I was sending you your funds on money as a gift, then you would get a message, you know, whether it's a WhatsApp or SMS or omni-channel message saying, hey, you've just received money. So the natural place we're putting that is within that flow to say, okay, you can go to a store, which you normally do today, and that's your normal action, and you can go and get cash. Or the alternative is you can accept the stable card and then move that money as USDPT into that non-custodial stable card wallet. We issue you with a Visa secured card instantly on Apple and Android, and then you're able to tap and spend where you see Visa. So you're now holding a US denominated value against the Visa card instantly as part of that natural flow. So that does two things and gives you two benefits as consumers. So one, for some consumers in some regions, it's the first or the neural bank capability they don't have today with the wallet. So you're giving them a visa digital opportunity that they don't have to be part of that digital ecosystem. For others, it's economic protection against fluctuation in currency and FX. So we know as a you know some regions in Latam really struggle with FX and the movement of currency. So it gives the end receiver control of when they exit to local currency and how they spend. So that's really the use case for the consumer. We're very excited about that use case. Um, it gives us a very quick, instant way to bring digital capability with a card to a really vast number of our current customers that today may not have that opportunity to have a digital card. So that that's the consumer use case um launching this year. And I think you're Rain up at the issuer of that, and we use Visa as a network.

Chiara Munaretto 13:57

So in this case, will the user be able to receive uh USDPT and then spend it directly? And you mentioned briefly before the loyalty yield side. How does that plug into the conversation?

Malcolm Clarke 14:09

So your loyalty yield is a really interesting conversation at the moment. So you're seeing early indication from the Clarity Act of what that is really going to fundamentally flesh out as. So obviously, now you have a consumer that is in a digital product that yesterday was a cash consumer that you really couldn't give loyalty to, you know, help save and give you know additional products in the future. So this brings again flexibility and utility to the table that says, okay, if you are spending and holding in visa on the USDPT card, then obviously you can earn cash back, you can earn loyalty, you can earn yield under the rules. So they're all on the table. So our consumers that decide they want to hold the coin for a period of time, then there's loyalty behind that, and those programs will launch out. I think the other thing which is incredibly interesting, this is a non-custodial wallet. So being able to load the wallet through the crypto. Again, some users are crypto native and they want to be able to bring money in and out. You have a wallet address and you can do that. The funding mechanisms allow you to move and buy USDPT in exchanges in the open markets, you know, trade and swap to USDPT, and then you can move it onto like card for spend. So that's absolutely available. And that's you know, part of that. How do you bring the crypto side to the consumers but hide it in the background, but make it available for those that are crypto native? So we're not leading with crypto, we're not speaking to our customers at this is a USDPT crypto card, and you're getting something crypto, which is exciting. A lot of consumers still globally are not quite there. What they really want to know is the funds are available, it's from a trusted brand, it can be spent and is available to be spent widely. So that's where Visa plays really nicely. And if they need to get cash, they can still go into a Western Union and take the cash. So again, you're really not coming to market with a, hey, we have this great stable crypto play on Solana using USDPT and it's you know a non-custodial wallet on a layer, your blockchain. Consumers don't understand that. Like if you if you try and approach it in that manner, you very quickly lose the consumer and everybody. They they understand trust, they understand certainty, they understand cost, and they understand can I spend it and get my money quickly? And you know, is it going to be available? Because if I'm sending you money, my key reason for sending it is you need it, or I'm giving you a gift. I need to know you've got it and it's available. Otherwise, this this whole thing doesn't work.

Chiara Munaretto 16:41

So this will be available in the app itself, and I would be able immediately to like spend and um on and off from the USB USDPT as I wish. My challenging question here would be: how do you see yourself then position against banks? Because if I get all these uh advantages with Western Union, why would I still be incentivized to use other banks?

Where Banks Still Matter

Malcolm Clarke 17:04

Oh, that's a good question. Um so I said challenging at the beginning. No, no, no. So my personal opinion here, not one of Western Union. I think you have to you have to take it on a region by region layer. So we've seen in lots of regions wallets are becoming and have become like this is not new. What we're doing is not some magic thing we've just discovered as as you know, a community and as a payment community. So banks are still going to have large plays. Like you're not going to, you may in the future, but today you're not going to take your mortgage from a crypto payment app. You're not going to take your key life moments from the banking system and bring it into a crypto payment app. DeFi is not set up for that. The trust is not there for the consumer. So I think what happens with this space, this is the early banking or early digital adoption to digital currency or e-commerce currency in regions that today, you know, fundamentally the banks aren't able to serve or the banks have not gone there. I think for others, it's just a pivot, you know, actually linking the digital asset and crypto networks to the banking layer. So we'll talk about the third piece of what we're doing. That third piece is all premised on today, we have multiple banking connections, both inbound and outbound, to the correspondent banking and the local banking layers. They're critical in the stream because, you know, at some point you do want to pay your mortgage for money or you do want to pay your phone bill or your car loans. So and you do have to bring in large, you know, you get paid through your bank through your direct deposits or through your your salary. Yes, you can see people getting paid in crypto and being actually paid into wallets, but there's still a money funding layer there that you still have to interact with. The key is how do you interact with it simply and on utility so that it's very easy for a customer that has funds in a crypto space like Quest and Union's wallet to then say, I need to send it through the Interact Network or SEPA or CEPA or real-time Rails to my banking layer because you know people don't exist in the same place. We see there's lots of fragmentation in this industry that will always exist. So yeah, I don't think I think it impacts the banks from potentially some of the ancillary services around you know, wallet spend peer-to-peer. But again, the banks are they're large, they're licensed, they're regulated. Yeah, they have other, you know, the banking life cycle is very, very long. You know, it's like they look at you as an individual from the moment you're able to be banked right through to the moment you leave the planet. So they have a life cycle for you, which is life. So it's it's gonna be an interesting how that all evolves and changes. I think, you know, um, we're happy to play in both spaces.

Chiara Munaretto 19:52

Yeah, I think another interesting point here is that of course you're still gonna have all this interaction with corresponding banks, but how do you see the interoperability among the different stable coins that will be launched, as well as eventual tokenized deposits that will sit within the bank itself?

Multi Chain Interoperability And Trust

Malcolm Clarke 20:11

Yeah, so I think like any industry that's that's been a challenge for a long time and will continue to be a challenge. So if you look at what we're doing at Western Union, we we decided to go into the Solana chain. There's a lot of interoperability on the Solana chain already with exchanges, you know, partners, wallets. They have a big ecosystem, and a lot of you know blockchains have similar big ecosystems. I think the challenge is going to be for the industry, including ourselves. There is going to be a need to do multi-chain, and there's going to be a need to have use cases in multi-chain. There is going to be a need to swap between coins for consumer that exist, whether it's our coin, whether it's circle, whether you just name a coin, like we pick a coin. That has to be solved. And I think there are, you know, things are being solved at the moment. There are opportunities for solving that. So you will see that play out. So for me, the biggest challenge is how do we ensure that you know one dollar is worth one dollar and when you swap to something else, that dollar value stays the same. That's on the other coins to do that. That will drive consumer adoption and interoperability because if it's not worth the same, they're not going to swap it. So consumers are price sensitive, consumers see the price sensitivity. It's very crypto native at the moment, but as you start becoming mainstream consumer, they're the things they look at. I also think brand wings out a little bit. So Western Union has its great advantage over everyone else. We have a global brand that needs to be well recognized and trusted, versus some of the coins, you know, the big coins are different, but you know, it's a high street brand that people recognize. I think if you were going to many high streets today globally and you were going to put up, you know, another coin's name and a Western Union name, the recognition would be there. So you have a trust layer that you can't avoid in conjunction. Consumer markets. So that's why this is very exciting for us because we do have a recognized brand in a trust layer. You know, I think a lot of the industry is spending a lot of money to get brand recognition. You know, they're sponsoring race cars and they're doing all those things. We're coming from a place where we have good brand recognition moving into the space. So we have this great opportunity for success with that.

Chiara Munaretto 22:19

Yeah, I think you touched a very interesting point when you when you mentioned trust, because when we talk about stable coins and privately issued stable coins, we kind of change the narrative of what retail or companies in general use to trust, right? So perhaps you're more another challenging question, but how do you see privately issued stable coins as opposed to central banks uh issued stable coins? And why do you think that we are moving towards uh an economy where you will have a lot of different stable coins that will be issued by companies themselves, which can also come down to, I don't know, diesel or like big companies who have uh who have uh payroll uh use cases, for example, and all the different uh retail users will start trusting their own uh major companies for um for using the the coin itself, whether it's like for for payments, yield generation, and so on, instead of the native currency uh of the country itself.

Malcolm Clarke 23:18

Yeah, I think I go to I go to a few places here quickly. So the first place I go to is use case. So the way in which we're designing it, and specifically I'm designing it, is based on use case and solving user problems. So today we've articulated a little bit what those user problems are around putting a digital capability on a money removement flow. So, you know, that enables you to play in this space, which is again, I think we're at the start of a very long journey here. We're not at the end of a journey. So, how this world adopts and moves and how different stable coins or central issued stable coins from banks start playing, they're all going to be struggling from what is the use case for this. So you've seen stable coins issue that don't have a use case behind them. That's a clear use case. So then, you know, they issue around we're going to give yield or we're going to drive it through exchanges, we're going to be a yield-bearing, we're going to give you know high points to users to hold it. I think that adoption goes away as the mainstream starts moving into the space. They're going to be like, okay, what can I do with this coin and why? So if my coin allows me to do X and it solves a use case and I get Y for it, then that's always going to win out. So I think again, the reason you're open and interoperable means it doesn't matter what coin the consumer gets or what you know centrally issued coin the consumer takes, if you can leverage that to still complete the use case, then you're in a very good place. So for me, money remittance today, we support 200 countries and you know the currencies that back them. So tomorrow, if there is a position of 90 different stable coins issued by central banks, or this one in this region is the popular one because they've got a good marketing brand, then being able to support that through the network, it's the same thing as supporting fiat FX today. The challenge is and how what we have to solve is the interoperability and the value of swapping that coin into USDPT, which is runs on my rail, that's now actually a technical problem that we own as Western Union versus it's a correspondent banking problem and FX problem. So if you come with Kiara coin, because you're really popular in your region, as long as it's worth a denominated value against the currency and we can swap it for a dollar value, it's an FX transaction in chain, and then we can program it through the chain, and then it arrives to Malcolm, whose favorite coin happens to be British coin. He can then swap that to British coin on chain. There's an FX rate either side, which happens today, but it's real-time, it's value-based, it's use-based. That's what's going to win out here. It's not about which coin is the most popular coin to earn yield. I think those mainstream, that's going to start going away. I I think you know, there's going to be a big user group for that, but it just doesn't become mainstream quickly.

Chiara Munaretto 26:06

Yeah, so that's also like how would you how you would eventually argue on the liquidity uh conversation that oftentimes I have with why right now we have only two major stable coins, and the more stable coins that we're gonna have, the bigger the um the fragmentation of liquidity will uh will be. So your argument here would be that in the end, the moment we fix interoperability among different stable coins, it's not a matter of uh fragmented liquidity anymore. It's just about making sure that uh we can swap it for the same value without overcomplicating the FX part.

Malcolm Clarke 26:41

Yeah, and I think look, you if you really peel back to how much um stablecoin liquidity is in the global financial market, it's a very small portion. So I mean the growth opportunity for stable coins, again, it is percentages at the moment, not tens of percent percentages of what is moved globally as asset value or digital value or you know, fiat value. There is plenty of fragmentation that can take place for big liquidity pools. Like if you were just to take, you know, play the assumption that if in three years' time we're incredibly successful, which you know, I'm sure we will be, and we move our entire fiat network through USDPT, well, my liquidity then is bigger than circles today. So you the liquidity, you have to start with your stablecoin from a place of economic value, which means you have to have a large economic pool that you can move it into that you're in control of. So as we talk about use case liquidity, coin usage. If I only ever did that, I'm moving over $100 billion a year in my stablecoin making, you know, treasury yield on T bills, I've removed all of my operational capital cost, which is percentages, then I'm already winning versus today. So everything else is you know the opportunity that stablecoin gives you with consumers and so on. And then we can talk about the last program, which is not always based on our stablecoin, but which is the open payment network and how you know that helps some of that interoperability and you know, moving to the last problem is getting digital assets to cash. So, you know, we can talk about that in a moment.

Chiara Munaretto 28:19

Yeah, can we expand uh a little bit more on that on like how do you see this um this open network and what does it even mean to have an open network and to to what extent is it actually open?

Digital Asset Network Cash In Out

Malcolm Clarke 28:30

Yeah, sure. So um we have a network called the Digital Asset Network. Um we have seven partners announced there is a a long funnel now of partners coming in. And it's a really basic proposition, which is today we have a retail footprint. Again, we've spoken about it close to 500,000 stores, and they're really good at doing multiple things, but their main job is they give cash out and bring cash in. So that's a cash network that is really unrivaled. So giving the crypto industry the ability to say, okay, within your wallets and the wallet of choice in the region of choice and the coin of choice, you now have the ability to turn that into cash using a single API anywhere in the world, that's the power of an open network. So openness means you can go anywhere and you can just literally through one API and one integration, move that through Western Union. The user pays a fee, there's an FX there, you know, much as many exit rails work today, but that's a digital asset network. So what's also really incredible at that later on this year, we add in the ability to use the banking rails as well. So in and out banking rails. So you can bring money into a wallet, you can take money out, and you can use cash. So a lot of the industry struggles in some part with certainly getting cash, but connecting to all the individual banking rails is costly, it's license-based. You can go to a single place now and you know connect through one, you know, one group with the digital asset network. So it's a very exciting product. We're seeing a huge amount of inbound for that, like more inbound, which is great. So you know, big partners have joined that. We've obviously the rain team are there, we have other partners in there. Solana joined recently. Um, there are future announcements coming of other partners joining as we push out this network, and they go live in the very, very near term. The first partners will start leveraging that. And what's super interesting there, the different use cases we're seeing in the different regions of partners, it's just incredible. Like you're you're seeing a real, a real vast array of you know partners coming to the table from different places that all have the same base problem. I can't, I don't have a trusted way, and I don't have a reliable mechanism for my users to get cash. So that's the problem and the use case you're solving there. So that's a very interesting network. Again, we settle behind that through USDPT. So settlement between us and the Wallets and partners, that leverages my coin. So that gives me another economic lever because we've now got money that's not in the Western Union ecosystem coming through the Western Union ecosystem and settling behind with the stable coin. And again, it's instant, they're crypto natrias, so they want to settle in stable. So you're really meeting them where they need to be, giving you the service that you have.

Rain 31:16

Rain is how modern brands launch card programs. Stable coins power the back end for more efficiency and global reach. But cardholders get a completely familiar experience. And setup takes weeks, not quarters. Learn why brands like Western Union choose RAIN at rain.xyz.

Chiara Munaretto 31:34

And what are the most successful case studies that you have seen so far, or more like the potential use cases depending on the region itself? Because you mentioned that there could be like everyone at the core has the same issue, but there's still diversity depending on the region and uh the customer segment itself.

What Partners Actually Ask For

Malcolm Clarke 31:52

Yeah, so so you can't pretend to know everything in this space. So I've been really surprised. The the working hypothesis was everybody needs a cash exit. So the the general lowest common denominator use case is cash exit. So that's been the outwinning use case. But we're seeing a lot of partners who need cash in. So the ability to actually bring cash and buy in their wallets a stable coin to pay for things, that's been a really great use case that was not necessary, it was a surprise because I thought people had solved the getting the money into wallets to buy crypto, you know, through the banking rails. But you know, people still have cash. So what they're trying to solve is I have cash, I have to go into a bank, pay it into a bank, it clears instantly. I have to switch to the crypto, put it in. So we solve that in the same API because you can walk into Western Union, you know, sign up to say you want to put cash in through the wallet. And then when you put the cash in, you get the notification it's available immediately to the wallet so that you can transact on it. Because it's cash into a system. We know it's there, we've we brought it in under the right KYC rules. So it's an instant cash rail that they just don't have in a lot of regions. So that was a very interesting use case that caught us not by surprise, but you know, we started with funds out and we're bringing funds in, was a little bit staged out for this year. It's accelerating because that use case is the one that really is being brought to our table quite quickly.

Chiara Munaretto 33:21

So those uh you would say are mostly like within the Latam and Africa and APAC region?

Malcolm Clarke 33:27

Honestly, it's not region specific.

Chiara Munaretto 33:30

So Latam So you would say is it's still like relevant for Europe as well, for example?

Malcolm Clarke 33:36

Europe is an interesting one. So Europe, um and we can talk about Europe in in detail anytime you want. I'm European, so I like Europe.

Chiara Munaretto 33:44

Me too.

Malcolm Clarke 33:46

So Europe, because of the regulations that you know in Micah and Eurocoins, a lot of US dollar-denominated tokens don't work where you have Euro. Like you have a strong currency, you have Euro currency, the British pound is a strong pound. Where they don't have Euro in other European countries, then there is a requirement to hold USDPT, and we're seeing some of the European countries there. The cash exit still is a thing, though, because in Europe, your wallet is a crypto wallet, and you still want to change that into euros. So I think there's a there can be slight confusion sometimes of because this is a US dollar-denominated network coming from a US provider, the value in Europe is actually quite small. Well, no, because in Europe where you have your Kraken wallet or pick your favorite wallet, I pick on Kraken because it's the it's the one I remember the most. I think buying things on race cards really works for me because I'm like, oh, that's Kraken. So um, but they still have a cash exit problem. Now, Kraken aren't part of our network today, but that's a European problem, or it's a US problem, or it's a your you know, English problem, or it's a Latin problem. So I think it's not region specific for that. I think you will see different usage and adoption based on how relevant crypto and how much use of crypto is in that region, but that's changing all the time. So the cash exit is still real. You still need Euros from, you know, there's no quick way to take your microcoin into Euros. So you know, we think about it the same way. So yeah, we don't see this big region play now. Again, the caveat is we're launching this right now. Ask me again in a year's time, we'll have data and we'll be able to say, okay, this is what the data is telling us. We're working on a hypothesis at the moment.

Chiara Munaretto 35:23

Yeah. So in this case, the Western Union wouldn't see itself with launching also uh say EU uh PD um coin just for the purpose of being market leader also in Europe, since at least within the European Union, there's a strong interest of making sure that it doesn't get fully US denominated.

Malcolm Clarke 35:44

So um I can give you some insight here. We have a European bank in Vienna.

Rain 35:50

Yeah.

Malcolm Clarke 35:51

Um we have a large wallet and customer base in Europe that we actively support and are very engaged. I feel personally um part of roadmap is a microcoin. I think you know the reason I called it payment token with the denomination before it is you can see that scale to MXPT, you can see it scale to EuroPT, you can see it scale to any currency PT. And we spoke before around you know, users like the coin in their denomination. Sometimes, especially as this market grows, having a coin in a euro denomination opens up an entire region and market. Why do you not do that? It's a natural fit. Being a market leader in that space, of course, we want to be the market leader everywhere, that's why we do that.

Chiara Munaretto 36:38

Yeah, no, that's that should be the goal.

Malcolm Clarke 36:40

That is the goal. Um, yeah. So, but it takes time and it takes effort, and it's you know, you have to have the right use cases and strategy behind that. So, yes, I I think there is possibly a day that you see a European payment token. Um, I can for sure see that in the future.

Europe Rules And A Future Euro Token

Chiara Munaretto 36:57

Yeah. And on this, perhaps you have like some insights or or or thoughts as well on what is already happening within the European Union, which in the end is the stablecoin consortia of 12 banks, right? So there's already like some expressed interest in uh empowering even more the Euro-denominated stable coins. So would you see yourself getting even closer to banks, or would you still like to play more um the solo game in this case, as long as what we said before, the interoperability is fixed, so we don't have any fragmentation issues?

Malcolm Clarke 37:31

I think you have to do, because this is again such an early like stablecoins have been around for a long time, but this new iteration of what's happening is certainly new. So while you have large banking partnerships taking place in Europe, being part of those partnerships and being part of ecosystems is very important because again, you're trying to serve where the customers exist. So that banking partnership is a set of customers that deal with us today, and you want to remove friction. So to me, my approach is very simple. It's how do you remove friction and put utility into ecosystems? That's how you become relevant as a player. So having a micro-denominated coin in a banking ecosystem that runs to be able to send somewhere else. So you have to remember banks are regional-based. They do cross-border money movement through correspondent banking. That layer with Swift is going to change for sure. They're not going to stand still. We're a global company that works in all regions. So we can help service those utility use cases of moving between region using a denominated coin. Um, they can do that themselves. But again, I think it's then what are the consumers going to do and how do you interoperable those coins and how do you use the treasury banks and the custodial minting and burning? Do you get down to the technical layers? You want to be in those technical conversations. And certainly there are some consortiums in Europe that we're having early conversations with that are very exciting. Um, there are other consortiums in Europe that eventually we will evolve into that. And there's some that we look at and you go, I don't quite know what they're solving yet. Like that, I still maybe I'm not intelligent enough to understand the use case they're solving, but you look at it on the level that they present it and you're like, I don't get the use case that's solving. I don't get what it means for my customers and future customers. I don't get what it means for us. Maybe it'll evolve into something that means that. So they're the ones that we tend to just kind of monitor and watch. And like anything in business, you kind of learn and gather information and make a decision on.

Chiara Munaretto 39:28

Yeah, and I feel often time is also kind of a chicken and egg uh movement in a sense that everyone is trying to understand better how each player is going to move and whether they're going to be the one integrating with one another or whether they are going to be the next infrastructure for their players. And in this case, is there like what is the single biggest uh friction that you think exists right now, more on the B2B or interbank um payment side when it comes down to the technical integration side, without having to go too much in the technicalities of it. But I think it's interesting to see whether you already see some of the frictions where eventually uh you could layer all in.

Malcolm Clarke 40:09

Yeah, so I think I think luckily for the way we've approached it is we're we're sticking to single chains to start with, and we're sticking to single dollar denoid coins at sub-use cases. So our frictions really come from you know, education of consumers, ensuring that our coin remains one-to-one pegged, um, liquidity and utility of the coin for agents when they do have coin and they want to exit the coin. So they're the places that we will see friction on our agent and user side. So there's a lot of effort and a lot of time being spent on making sure those frictions don't exist. Because again, when you get down to the lowest common denominator, it's a user or an agent. If they can't exit that coin for liquidity at the same or better rate than they do today, it doesn't matter what you do on the technical side, it doesn't matter how much effort and brand new put around something, it's just not value to them. So you're seeing a lot of friction in that, and that is a very fragmented marketplace. So we're having to spend a lot of time building and innovating on that layer for our agent side, you know, so they can get liquid on coins. And you know, that's where we spent a lot of effort. So there's a ton of friction there. As we evolve and we get to multi-chain and we start supporting your coin swaps and things, that friction we've already spoken about, that's a true friction that exists. I feel use cases when you're talking to large treasuries, so between ourselves and a huge treasury, we may move to Ethereum, you know, contract and do one-to-one Ethereum because that we're not needing speed of salona, you're needing like no friction and interoperability, and you can program directly. So again, the technology is there and it solves it. I think you're you're going to evolve into that. And this this technology market is moving incredibly quick. The other advantage and the other thing which is very exciting is actually starting to build in directly in network. So on-chain FX is what that means. You know, we spend a whole hour talking about that. So again, if you think about my biggest problem and my biggest opportunity and my biggest solve is FX. If you can bring that into the transaction and put it on the chain as part of a transaction, we've already spoken about, there is going to be multi-currency denominated coins that need swapping. There are going to be FX rates. They exist on the LJs at the moment. You bring them in, you get finite, you get control. You may, in theory, get better FX opportunities and rates. But there's a whole bucking and bidding platform behind these things that happens in Treasury World today at the top layer that needs to be brought into a chain layer. So that's where interoperability and friction happens and how you solve it is the innovation you're looking at today.

Chiara Munaretto 42:44

So there's going to like, I think two interesting points here. The first one is that eventually there's going to be a completely new uh FX market that is going to there is going to come in place and there will be both like an opportune. What, sorry?

Malcolm Clarke 42:58

Possibly, yeah. Let's say yes.

Education Liquidity And On Chain FX

Chiara Munaretto 43:00

Yes, yes. I mean, if if everyone is going to keep launching all these stable coins, then I think it's kind of uh impossible not to end up there. And I think there will be a lot of different types of evolutions, even on the trading side, but that's a whole other conversation. Um the other inter the other interesting thing that you mentioned, I think it's really on the education side, which I think is something that, for example, even with stablecoin insider, we do a lot. Because if the user itself doesn't understand, it's really hard for them to make the bet on a new stablecoin when they just want to, once again, as you said as well, get the benefit of moving money faster without even having to understand. So I think the interesting thing here that I would be very curious to see over the next, let's say, six months to a year, is whether it's going to be the user itself that will have to educate himself or herself to really make a decision. Do I want to still use USD or do I want to start using UST? Or all other stable coins, or is it going to be players like yourself or like other banks that will just integrate stable coins and use in the back end the stable coins without enough Rams and the user itself will not uh have to um make a decision because the Rails behind it will just make the best decision for them, if that makes sense.

Malcolm Clarke 44:23

No, it doesn't. I think I think in our case it's a combination of both. So, you know, I always use you know, you always use your parents because they're you know sometimes the oldest people you know. Exactly. So, you know, my mum in the UK receiving a US dollar denominated stable coin from me, she's gonna have no idea. Well, she actually does know what that is because I speak to her, but you know, generally general terms, she would have no idea what that is. Receiving a gift from her son that she can spend, that's the use case. Now, in the background, how that moves, you know, how it works, she does not care. Like, so I I completely agree with you. I think the other side that we haven't spoken about is I think there's a whole industry that will start evolving around the DeFi space. So DeFi is still, you know, again, been around for a long time, but it's been very much in the crypto world. How do those use cases start moving into the consumer spaces at a you know a mass market level? And how do those start getting adopted is going to be super interesting. So, you know, the ability to take asset-based tokens from banks or asset-based stocks or asset-based lendings, and then do those DeFi type lendings and having stablecoin as that mechanism to do that because the assets are slow moving versus fast moving, although they get fast moving as well. That's super interesting. So again, if you have, you know, we've taken the premise that if you have the capability and the infrastructure, it gives you the option to offer that and play in those spaces in the regions it makes sense to solve the needs of your customer when they're ready for it, versus, you know, hey, let's go and do a DeFi play now where you can do lending against your crypto to a market that you know you've already articulated doesn't really know what a stable coin is. So now you're like, hey, you've got tokenized gold and you can loan against it, they they could look at you sideways like you're insane. So it's it's a really interesting evolution into this space and how I think with the Genius Act and things, for the first time it's starting to become mainstream. And you know, coming from the crypto and the digital asset and the digital identity space and working at Hyperledger to now see it start having the promise of use cases is is very interesting for me.

Chiara Munaretto 46:36

No, for me too, and I think I'll I'll also be very curious to see how exactly, because we eventually know that a lot, if not everything, will be tokenized, but will be banks the ones that will be start offering tokenized products, or will let's say crypto exchanges and digital assets institutions start offering banking services as well, which comes down, for example, to spending. So there's this kind of like battle market, but they are all pointing to one direction, which in the end is programmability, interability interoperability, and access to markets 24-7 in the easiest way possible, without ideally the user having to figure, figure out what am I even doing, what am I using? I just know that it works. So I think we're gonna see a lot of startups, but as well as a lot of big players that will really try to reach that as soon as possible. And speed probably and regulation are going to be two of the most important factors here.

Malcolm Clarke 47:34

Yeah, I I again I completely agree. I think you've got it's gonna be a very interesting industry evolution. I think you're seeing in a lot of places regulators, and you mentioned regulators trying to catch up, like just like genuinely looking at this. You know, essentially what could be a complete mind shift in changing how the financial systems are operating. And frankly, they already do. They've just operated to the side. So that side is now moving into core financial operations and how things work. So you have the periphery of KYC AML and you know, know your customer and those things, fine. But what happened in the regulated space, you know, FDIC and all the things in the US. So it's super interesting how this is going to evolve. I think it's uh it's gonna be a very interesting period of time for that space. And you know, again, when we move out of different, you know, evolutions, I think things will be different. But again, from the consumer point of view, I don't think they'll see a great deal of change straight away because I think the services will operate the same way. What happens behind them, as you've suggested, that changes first. And then eventually it flows through to the consumer. So again, how our money moves as Western Union, it appearing on a stable card as a US denominar denominated capability. We're using USDPT as a denomination, but for them it happens in the same way. It moves the same way. They get it quickly, they don't care that it moves by stable, but they can spend it and they see it. That's how it's gonna start in the first instance. You're already seeing that. So yeah, it's it's a super interesting time.

Chiara Munaretto 49:10

Yes, well, that's for sure. And and the second instance is that will be like when we we are gonna touch upon like uh agentic payments as well, because once you have the programmable layer, but I won't I won't uh get too deep into that. But uh ideally, like in a in a year from now, we will be sitting here again and I will be asking uh how have you integrated your agents with uh with USDPG?

Malcolm Clarke 49:32

So we're gonna have to call our agents something different because the market's now taken the word agent and made it integration. That's true, that's true, that's true. I was in a conversation where we were a few minutes in and more minutes than we should have been as intelligent individuals, where we were talking about completely different agents. So talking about AI and I was talking about agents in the store, and they we just hadn't connected the dots that we were talking about different things. So yeah, it's gonna be um certainly vernaculars and how we refer to things, you know, they they change often, but that's true. It's it's funny how those things do change.

Chiara Munaretto 50:09

I mean, eventually every agent that you have will have its own agent, so ultimately we'll kind of bind it. It's just a matter of like two years or so.

Malcolm Clarke 50:18

I have an agent today that runs on WhatsApp and does all of my business.

Chiara Munaretto 50:22

Okay.

Malcolm Clarke 50:22

Um core agent. I I came from the AI space before this role, so I built my own. But yeah, he's he's called Dennis and he does a lot for me.

Chiara Munaretto 50:31

Well, next time we can bring Dennis to the conversation as well. I'm sure it's going to be like pretty smart and bring us some real-time data and stuff.

Malcolm Clarke 50:40

You'll just be interviewing Dennis. I'll just send Dennis.

Chiara Munaretto 50:44

Okay, like well, yeah, let's do it next time. I think the close-up, um, it would be nice to see like let's put, let's say one year for now, how does West Western Union use DPT uh point is at? What has it been achieved? What are we going to be super proud of?

One Year Success Metrics

Malcolm Clarke 51:02

Like, this is this is a really, really good question and and something that we wrestle with often. I think you have to start with the consumer. So I think for me, being proud of and achieving will be having those stable card markets live and those consumers leveraging that opportunity and capability to be your first digital or first wallet opportunity or even just you know ancillary to what they do today. I think having that in those markets with you know a large volume of you know holdings and spend patterns means you've been successful. So you really look at those data points of usage is success. I think that brings a whole new layer to our consumers today that you know some of them have because we do have wallets and we do have banking services, but you're bringing it to other places where they don't have that opportunity. And we see great value in that today for what we do already. So I think that's going to be a really good marker of success and where we want to be. I think on the treasury side, um, you know, I know my CFO Matt would be, you know, it'd be remiss of me if I wasn't to say he would like to see and I would like to see a huge operational saving of not using correspondent banking networks and parking capital. I mean, that's our economics. You know, changing from a cost basis to a plus basis as an organization gives you capital, you know, liquidity that you know today is locked up. And you can do more with that. You can innovate, you can MA, you can do a whole bunch with that. So again, in a year's time, if we've moved a good portion of our correspondent banking layer to USTPT and it's you know adopted by agents and it's solving that problem, I think that would be huge success. And then on the digital asset network side, we're already seeing success in that network. You know, we do have a lot of partners coming in, expanding that into the non-crypto wallets and the non-crypto spaces so you can, you know, if you think about one of the problem statements that I'm working through with the teams today, if you are an organization that pays out globally to influencers, creators, drivers, you know, guys on bikes, you know, workers, and you are regional based in the US and you need to disseminate that money, you're going through the same challenge I have as a correspondent banking layer where you're corresponding banking down to the layers and those costs and this complexity. You know, expanding down to those types of partners and saying, hey, you can leverage the same API stackers, X company, who's not X is in the X company, Y company, because there's no Y company. So as Y, and disseminate down to your users in a stablecoin that they can then get liquid instantly in how they want to do it and spend how they want to do it. I think that's going to change huge business models that today are really stuck where we're stuck, which is dissemination and correspondent money movement that is costly. So expanding down into the non-crypto partners is a huge opportunity, and we're excited about it. Because the digital asset network is really, we're a digital asset network moving. You can disseminate with stable or cash or you know, into a card. I think success there will be, you know, moving just beyond the crypto wallets to those as well would be you know a huge win for everybody in the industry and solve some real use cases. So that's kind of how in a year's time, if we've solved those things, I think I would be you know incredibly happy. And I think you know the team would have done an amazing job to do that.

Chiara Munaretto 54:23

Yeah, and I've obviously I would be absolutely happy to hear all those results and data that we that we talked about before uh before live. But I think it's really about like the trust that you already have in the market that probably will really be like the biggest enabler in this case because they already trust you. And so you're basically just offering a better version of what you've already been serving for uh such a vast majority of uh of countries and uh and companies. So I'm I'm I'm very, very, very excited to see how that will play out in uh in a year's time and of course whether agents will still be agents, or we'll we will have to change the terminology.

Malcolm Clarke 55:03

Getting rid of agents, no. Our agents will still be agents, but they may have AI agents. Yes, I'm sure they will change.

Chiara Munaretto 55:08

Exactly. I hope so. I hope so. Well, Malcolm, thank you very much for joining us today. Uh it's been a pleasure. Uh there will be a lot to to talk about, as mentioned before, but uh we'll keep that for uh for the next uh next episode, uh next episode, especially when it comes down to I think even you'll bearing stable coins and what you can do when you have such a distribution. I think there's uh there's an interesting topic that we might touch upon later on.

Malcolm Clarke 55:34

No, I'm happy to come back and you know thank you for the time. And this has been a super interesting conversation, so I really appreciate it.

Chiara Munaretto 55:40

Thank you. And thank you also everyone for uh tuning in and make sure to subscribe to all the other episodes that will come up shortly.