Jerónimo Ferrer, manager of the exchange, believes USDPT is targeting cash-based markets.
Ferrer believes that USDPT seeks to eliminate structural frictions in the remittance business.
The arrival of USDPT, Western Union’s stable cryptocurrency, to the market does not imply head-on competition with USD Tether (USDT) or USD Coin (USDC), the main stablecoins. Instead, it aims to be more of a complementary tool for the ecosystem.
This was stated by Jerónimo Ferrer, Business Development Manager for Argentina, Paraguay and Uruguay of the Bitfinex cryptocurrency exchange, to CriptoNoticias. In statements this Tuesday, May 5, the executive asserted that the asset, issued on the Solana network, “will serve much more as a complement through the ecosystem than as a direct competitor.”
The executive explained that digital currencies such as USDT have high organic adoption rates in different regions, such as Latin America, driven by savings and hedging against inflation, while Western Union’s proposal is located in another niche, which is “settlement infrastructure instead of a store of value.”
“In the long term it may gain some volume, but it is unlikely that it will be able to compete with the liquidity and international expansion of the largest stablecoins it may face,” the spokesperson said. “Western Union’s proposal appears to be a more payments-based and controlled solution,” he added.
Ferrer was emphatic when pointing out that USDPT is a tool whose objective is to “eliminate structural frictions” from the remittance businesssuch as high shipping costs and settlement time for cross-border payments, operating primarily in cash-based markets.
According to Ferrer, a stablecoin like USDPT, running on a decentralized architecture, could certainly facilitate near real-time transfers and “put pressure on fees in key corridors throughout Latin America, where sending money can be excessively expensive and slow.”
However, he warned that the true scope of Western Union’s asset “will depend on ‘last mile’ implementation (the switch to cash), local regulation and user experience.”
Low fees, speed and convenience will maintain the use of stablecoins in three key areas: freelancers and exports, informal currency conversion and international trade. More than a temporary hedge, stablecoins are becoming an integrated financial infrastructure in the digital economy. In this sense, Western Union benefits from integrating this stablecoin into its global physical network to further penetrate cash-based markets.
Jerónimo Ferrer, Bitfinex.
Ferrer also indicated that the incursion of a traditional heavyweight firm such as Western Union into the cryptocurrency ecosystem is seen as a sign of maturity for the digital asset market.
“Traditional players also suggest that stablecoins have gone from being a mere experiment to now being a useful financial infrastructure, particularly for international payments,” Ferrer commented.
As you see it, this fusion strategy between the conventional financial world and decentralized technology seeks to improve efficiency and reduce operating costs against new competitors in the digital environment.
A “kind of bifurcation of the market”
Ferrer’s comments regarding the Western Union stablecoin are complemented by the views of analysts such as Aníbal Garrido, director of the BT&C Academy at the Andrés Bello Catholic University (UCAB), who defines the current situation as a “kind of market bifurcation.”
Consulted by CriptoNoticias, he said that, while USDT has gained ground in fragile economies due to its relative independence and autonomy, the USDPT born under a strict compliance and surveillance scheme. In this scenario, Garrido believes that Western Union is not competing to offer “free money”, but rather to position a “corporate programmable hard dollar” that is fully integrated into the traditional financial system.
Along the same lines, economist Aarón Olmos pointed out that the new digital currency of the money order company will have to fight for its place demonstrating efficiency and effectiveness on your shipping platform. According to Olmos, traditional assets are already part of the daily financial maneuvers of Latin Americans, so the success of USDPT in this region will depend on its ability to offer tangible advantages in the retail remittance market.
Indeed, despite Western Union’s institutional support, the digital asset ecosystem in Latin America presents barriers to entry for new corporate competitors.
It happens that, in regions with high inflation or economic crises, The Latin American population has developed a culture based on financial autonomy and the immediate liquidity offered by decentralized networks.
Certainly, Western Union comes to complement the ecosystem as a corporate option, but it faces a region that has already adopted the liquidity and freedom of the best-known digital assets.