Remittance firms are accelerating their adoption of stablecoins to bypass parts of the traditional settlement infrastructure, but industry experts say this does not mean the decades-old SWIFT network is disappearing anytime soon. Western Union’s launch of its Solana-based stablecoin USDPT in the Philippines and Bolivia this week is the latest example of the growing overlap between traditional payments and crypto infrastructure.
Stablecoins as a settlement alternative
Western Union CEO Devin McGranahan said during the company’s Q1 earnings call that the stablecoin will serve as an alternative settlement layer to SWIFT, enabling real-time transfers over weekends and holidays when traditional banking rails are closed. The move follows the launch of Western Union’s Digital Asset Network and comes as rival MoneyGram also deepens its crypto integration, announcing a partnership with Kraken to allow users to convert crypto into cash for pickup.
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Digital assets allow transfers to begin moving and settling onchain in real time at much faster speeds, McGranahan noted, addressing the capital tied up over weekends because the traditional banking system only settles Monday through Friday.
SWIFT’s entrenched position
Despite these developments, SWIFT remains deeply embedded in cross-border settlement infrastructure used by banks in more than 200 countries and territories. The network itself has been experimenting with blockchain technology, announcing a shared ledger initiative involving over 30 financial institutions last September.
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Bernardo Bilotta, CEO of stablecoin infrastructure platform Stables, told Cointelegraph that SWIFT is not going to be replaced by a single announcement or stablecoin. “It’s deeply entrenched, and for many types of institutional transfers, it works well enough that the switching costs outweigh the benefits of moving to something new,” he said.
Unlocking ‘dead capital’ in remittance
Faster settlement offers clear benefits for end-users, who are no longer constrained to business days. On the backend, it unlocks what Bilotta describes as “dead capital” for remittance providers and their local partners. He explained that companies like Western Union have capital parked across hundreds of correspondent banking relationships globally, pre-funding accounts so money is waiting when a transfer hits.
“It earns nothing, it does nothing except guarantee that a payment can settle two or three days from now on a banking schedule designed in the 1970s,” Bilotta said. Moving settlement onto blockchain-based assets compresses the payment timeline from days to minutes, though he noted that not all unlocked liquidity will flow into useful earnings, as stablecoins also require locked reserves and real-time treasury management.
Sota Watanabe, CEO of Startale Group, which is building the JPYSC stablecoin in Japan, added that the extra time in traditional rails creates safeguards and buffers. Institutions batch transactions, net exposure and manage liquidity around banking hours. “Stablecoins remove that delay. Powerful, but it means treasury systems must now operate continuously, not only during business hours,” he told Cointelegraph.
The risk of new silos
While stablecoins promise faster and more efficient settlement, not all blockchain-based payment systems are built equally. Bilotta argued that private settlement networks such as Western Union’s USDPT offer institutions tighter control but risk recreating the same fragmentation blockchain originally aimed to solve. “Every company that launches its own stablecoin creates another walled garden that the rest of the ecosystem has to bridge to or ignore,” he said.
Unlike private stablecoins operating inside closed ecosystems, public stablecoins such as Tether’s USDt benefit from shared liquidity pools and interoperability across exchanges, wallets and payment platforms. “A dollar moved through USDT in Thailand is the same dollar that arrives in Australia,” Bilotta said. “No bridging, no translation, no bilateral agreements between private networks.”
Watanabe shared similar concerns, warning that if every major payment company launches its own isolated settlement network, the industry could simply recreate the siloed infrastructure of correspondent banking on blockchain rails. “Private settlement networks are efficient inside a closed ecosystem. Their weakness is interoperability,” he said, arguing that the long-term advantage of public blockchain rails is shared infrastructure where liquidity can move more naturally between applications, exchanges and financial systems.
Conclusion
The adoption of stablecoins by major remittance firms marks a significant shift in cross-border payments, offering faster settlement and unlocking idle capital. However, SWIFT’s deep entrenchment and the risk of creating new fragmented silos mean that coexistence, rather than replacement, is the likely near-term outcome. The industry must address the balance between efficiency gains and maintaining interoperability to avoid rebuilding the same infrastructure it sought to replace.
FAQs
Q1: Will stablecoins replace SWIFT completely?
No, industry experts say SWIFT is deeply entrenched in global banking infrastructure and switching costs are high. Stablecoins offer faster settlement for specific use cases, but SWIFT is likely to coexist for the foreseeable future.
Q2: How do stablecoins improve remittance settlement?
Stablecoins enable real-time, 24/7 settlement on blockchain networks, eliminating delays caused by weekend and holiday closures in the traditional banking system. This compresses payment timelines from days to minutes.
Q3: What is the risk of private stablecoins from remittance firms?
Private stablecoins can create new walled gardens, fragmenting liquidity and requiring bridging between networks. Public stablecoins benefit from shared liquidity and interoperability across platforms.
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