¶ Intro
The race is on, it seems like, what's it like from your perspective to see the race and who's running in parallel with you.
You have to leverage what you do as a fundamental business. We have over one hundred and something million customers where we can now issue cards to that don't have them today. It's not about a race to who can do the first coin or who can do the first blockchain. It's
who can furnish the first use cases. If we can go to an emerging country and emerging space Saturdays under banks on Nerve Bank and give them digital music cards that they can get funded to from loved ones you've serviced the use case stand that they have a need versus we've got a coin in the blockchain.
Yeah, let's go. I don't think that's the race.
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includes Ripples, r L USD. You can earn up the five percent on that stable coin and five point two five percent on USBC. So if you do like to learn more about Uphold and all the great services they offer, visit the link in the description. Hey everyone, welcome into the Thinking Crypto podcast. I'm your host Tony Edward and we are recording at Station three in New York's Financial District. And joining me is Malcolm Clark, who is the VP
of Digital Assets at Western Union. Malcolm, great to have you.
Thank you for inviting me. This is exciting.
Yeah, Malcolm, I am excited because we were talking before the recording. I've been a user of Western Union for many years, you know, sending money to my family overseas, and to see Western Union launch a stable coin and embracing blockchain is so fascinating. So I'm excited to learn the details from you. Maybe we can kick it off
¶ Malcolm's background
with your background. Tell us a bit about where you grew up in what's your professional background?
Sure, so I grew up in Manchester in the UK, so like yourself, not a traditional US kid background wise. You know, had a very interesting early career in telecoms, so working on the first mobile apps, first Blackberries, which was interesting. So that's going to age me right now, So now you're talking to an older guy. Then had an opportunity to move to North America through Canada, so worked for TD Banking Canada, where I built out the
first digital asset network. So a number of years ago, already playing in the blockchain space of how do you secure privacy by design your essential identity and share it with others on a blockchain through hyper ledger, so partnership with the major banks there and then really having what you wouldcord with not in party sort of store, and then the banks you would log in and provide your identity to those stores or to the government in a
secure manner. So after that, had the opportunity to move to San Francisco with Zell early Warning to build out a very similar identity platform, working through the Zel ecosystems, and then found myself going through a Japanese bank running AI services and landed out Western Union about eight months ago, where I picked up ecosystems, which is the digital wallets and digital assets. So working through that journey and bringing
Western Unions. You said, a traditional moni transmit company, your global footprint, lots of people use us into a crypto asset digital asset space. So yeah, very interesting time. And stable coins and the genius actor has really been that catalyst to start really pushing after this stuff.
Oh absolutely. And in your journey in the banking finance,
¶ Discovering Crypto
payments world, you mentioned you were a TD bank and starting to set things up with digital assets and so forth. How did you hear about bigcoin or blockchain and was it a natural thing for you to recognize it and say, hey, you know, this looks like it's the future.
It's interesting because you know, back then, much like stable coins now, they've been around for a while so this isn't some new thing that suddenly has become you know, it's a good buzzword, it's a trend at the moment. So that's great, and it's driving adoption back then reusing R three quorder and doing things with the bank accounts. So how do you use a smart contract to move
funds between institutions? So almost into that you know, tokenized deposit space as you recall it, now, how are you using you know, those smart contracts to you know, essentially move funding. Then at the time, we're in a space where the banks are looking at how do you add additional service? So you have a depart that account, you
have your mortgage, you have these traditional finances. You know, what is the trends at the moment and how can you add those services to the banks of payments are always you know, you've always had two issues with payments. One is speed, the second is security and safety. So speed is solved with you know, the Interact network did
same day deposit, you know, email transfers. Safety security was really driven around identity and saying, okay, if you can add an identity to the payment, create that token as a safe, secure token between the banks. Then are you in a better place. So the answer is yes, So what's the technology that could do that? And that's where you get to well, blockchains evolving, it's, you know, one of the blue chips of the bank. So what can we do in blockchain? How can we leverage are three?
How can we leverage hyper lecture, how can we leverage bitpoint? So it's really a natural evolution of saying the blockchain and ails for immutable digital movement of things in a secure manner. It means every other bank can't see the identity, the government can't see the identity unless they need it, and the consumer permissions it. So it's really natural how I got into that space and started working with the payment network, the un NCY network and the safety security
and pulling them together. So it wasn't you wake up one morning like that seems to be the path, let's do this.
It doesn't.
It has to be more natural evolution otherwise it just becomes a buzz and a trend and it drops off. So it's got to have real foundation in utility, use case and why you would do this?
Oh, absolutely, and that totally makes sense in discovering the
¶ Permissioned & Public blockchains
use cases and the utility and you know you mentioned using hyper ledger fabric and that is more of a permission private chain, but there are public blockchains. Do you see that the future will include both, Like institutions will have their own internal chain so to speak, but they're maybe bridging to public chain.
Yeah, I think like institutions, So you're talking Canada's five major banks nine years ago created a permissioned private blockchain on Hyperlagure. So innovation kind of at the forefront nine years ago. So banks have continued to evolve. So permission based blockchains, permission based tokenization of assets, that's the thing, that's what they do today. Our three quarter has been around for a long time. I think that will continue.
So the banks will continue to store tokenized assets, it will continue to store tokenized stock or those types of things. They are fundamentally localized. Banks like global banks still have localization stable coins and those public blockchains. They're really the speed on top. So they're the edge and that's where you're going to see the innovation you're seeing now in the driving with the permissions of the genius acts and things.
How do I take that tokenization that's going to work on the institutional layer and how do wallets really leverage that to move things quickly internationally? So banks still work, you know, five days a week, nine to five weekends. Another thing, commerce runs twenty four to seven. So that's where you see you know, the stable coin and the public stuff and the permission stuff, they will layer on top of each other because still institutions are going to
need you need to move large money around. You know, large money movements are you know, their permission, they're regulated, that governed, they're protected. Fast movement is protected by the organizations that move it. And in that manner, So I think they both come together and they stay together. I don't think it's one or the other. I don't think you're going to see quickly, at least large institutions moving the treasury between two ginormous institutions on a public work chain.
It's just you know, there's no need to do that. There's the value of doing that. The benefit of doing that is just not there.
So yeah, and not to mention privacy, right, there's certain things they don't want out there on the public chains.
See.
I mean, we'll get into why Solana later, I guess, So Solana, there's there's some interesting developments in the public space. So privacy is one of those interesting conversations like the crypto will grew up with, it's got to be open, it's got to be public, have to have complete transparency and everything happening, because if you don't, then you know essentially why are we doing this and you're trying to
not go down the institution path. You want the openness. However, there has to be a balance that says something's in a transaction you do want to protect, like you do want to protect certain things, like the value of the transaction is the volume, because frankly, it doesn't have value
to the world, has value to the individuals. So Slana and their extension is a very interesting way of saying you can program parts of your smart contract where you do add the privacy layer, and then if somebody needs to see that, much like a bank today, you can do a legal requirement of legal intercept or legal warrant to actually have that transact and a lock to see what's happening, because that's the people who need to see it.
So the privacy by design piece is very interesting when you get into that public permissioned, private permissioned, public open like there needs to be privacy somewhere. So again, that's going to be an interesting evolution in this space.
The interruption. Hi, I'm Tony. I'm the host of the Thinking Crypto podcast. I wanted to ask you if you can please support the podcast by hitting the like button subscribing. If you haven't as yet, you can leave a comment below as well. And if you're listening on a podcast platform such as Spotify, Apple or wherever you get your podcasts, please be sure to follow and hit the five star rating. I'll let you get back to the content. Thank you so much. So there's a question I'm.
Going to ask you.
I know the answer, but I'm thinking of the folks who are new to all this. They may have used Western Union in the past and so on and so forth. Why is Western Union creating a staple coin?
So we thought it'd be fine. No, my CEO said, there, no, I'm totally joking.
Now.
I think there's there's a couple of things that are are happening globally right now.
There are users.
They're not going to care whether we have a stable coin or we send your money with the fine unicorn you to them. It's about speed, it's about getting the money where they need it in the most simplest way.
The best utility stable.
Coins for Western Union, there are actually three programs that mean something very different when you apply the lens. So for us, we move billions of hours. Globally, we are restricted sometimes by the banking network, so you know, the five days a week, the nine to five weekends, and not a thing. So the treasury use case for our coin is actually it's fairly obvious. So it says, if I can move liquidity, you know, seven days a week, twenty four to seven to the places I need it,
it actually changes my economics. It creates you know, capital value for me because I'm not parking capital, and it means whatever I move, I can hold yield versus today, I move money here, I move money there, and I have pools of funding set all overplace. So if you take vantage your economic premise for a Western Union, it says, look, we have an economic pool. Now that is a new pool.
It's operation efficiency. It means we can control our capital better, we can do things with that, and it gives me levers. So that's one reason why the consumers frankly don't care.
Sure.
The opposite side of that is what are the use cases and the adoption the consumer side that I can libuse that too. So we were speaking before we started around you're sending money home and you're gifting. The natural flow is you'll send money, you'll walk into a store, you'll take that cash and go and spend it. But it's cash, so cash is king in a lot of places. With stable coin, we're able to do things like issue a digital card or a physical card in places that
naturally we don't exist. So we have a stable card program and we're able to say, hey, the money that's going to your family member, they can now take a card here, so it's early banking if they don't have banking, or it's access to tap and spend digital payments. I can go around and pay my phone billks. I actually have a card number. Now I can do those things. So the same coin that's going to drive my treasury
is going to drive my consumerization. So I have a US dollar denominated value on a visa card, so that moves instantly. Economics are that and there's some loyalty you can put around that in the future and you can use that. So it's a consumer use case. So what changes for Western Union consumers is they now get global access to a card fifty seven countries, pretty global. That's
one second, really big one is our partner network. So Western Union is evolving to say, how do we give access to the things we have as critical things like our stores to everybody else in the B to B space. So crypto wallets, stable coin wallets, they still have a last mile problem. So I'm really good at getting digital to digital. So I can send your money, you can send it to your digital bank, you can send it
through paypals or whoever. But you want cash, you're really restricted to an ATM, which is expensive, or a money exchange place which is going to be like change it into tether and then I'm going to take you twenty percent, which I saw in Columbia this weekend, and it's a really concluded, very restrictive flow that gets quite expensive for the end user. What we're saying to these wallet partners is, hey,
you can leverage our network. Putting Western Union is the ability to exit on your network and you can go directly into my store and take cash. So the user flow is you're in your wallet. Let's pick cracking because it's we all know who crack and are you have your wallet balance and you're able to say, ooka, I want to send it to a Western Union, complete the FX, and then walk into that store and then just take the cash and the FX is you know it's there.
It's a very clean and clear fee of your pain, which is a small fee, and then you walk out with the cash at the end, so you're actually really turning it to that last mile cash. We have close to four hundred thousand stores globally, so you have four hundred thousand places on this planet that these wallet providers can now say you can get cash. So we have four big partners, large partners joining the network. We have pipeline of other ones coming through that are going to
leverage this. So it's interesting how you have the economics the two the use case for users and the business to business use cases just wrapped in the same USDPT stable point.
Wow, that's incredible And I love to see and hear of the technology making people's lives better. And you know, here in the United States and someone to develop country, it's easy for us to say, oh yeah, I don't need that, but in other countries people absolutely need these things. In the stable coin is called us DPT and it's
¶ Why build on Solana
built on the Salana blockchain. So tell us why Solana was selected and are their plans to expand to other blockchains.
So, yeah, so we selected Salona. So we looked out a couple of things. You know, when you're selecting technology and you're an institution, especially a public one, you go through a process of you know, technology fit, partner fit, you know, roadmap what they have coming down the pipeline. You know, blockchains they're economically they're really not businesses that are normal businesses where you're paying for a service. You're
leveraging their capability. You know, they help you fund other things. So Solana they close two gaps for us. So one on their roadmap with extensions, they have this ability to close the proceed which we spoke before, So that ability to say, hey, we have extensions on our marchain. You can leverage to certain things in your smart contracts, so when you're moving between your agents or your big institutions, you can essentially hide certain things because you don't want
them on a public blockchain. So that was a big one. The second one is Solana has gone through teething problems in the past, they've really got to a point where them you know Stellar other networks, you know, they're really running about the same now, they're running the same speed, they have the same utility for users, they have those fast use cases, so they kind of all fit in the same So we like Solanica's they've got that capability. The last thing is something that Solana do really well
and actually really enjoy working with them on. They have these pods I think they call them pods that they have globally that look at use cases for DeFi cryptoneatif use cases really unlocking the market to say, if you use the Slana blockchain and the stable coins are running on the blockchain, one of them being ours, then they will introduce developers, you know, new natives to blockchain, natives to blockchain, to the ecosystem, and then bring them to
the table so we can work directly with them, or we can you know, understand their use cases and give them benefits like oh, you can use the Western Union stores or we can give you loyalty for.
That use case.
So they have this really great development arm that takes our foundation and really drives out those use cases. And they've been a fantastic partner in that, and they promise that at the time of picking, and they've really followed through with that stuff. So they've got some interesting things going on other blockchains. You know, we're going to do ethereum contracts at some point. You know, obviously we're an institution.
We're moving to an institution. Having our own smart contracts makes sense.
Who knows.
If there's plenty of blockchains coming out of your circle has their own, friends that Stripe have their own, you know, there's Base then you know all of them like this, right, you know, so they're all developing, they're all evolving, they've all got unique use cases coming to the market. There's all things that they're going to bring to a financial institution like ourselves from money.
We're written space.
Where we can go to those blockchains for use cases as well. And again, this is foundational for us at Western Union. It's not a three month project and then we're going to go and do something else, like genuinely as a foundational piece for organization for the next iteration as we evolve as an organization.
I appreciate you sharing that thought because that was going
¶ USDPT Stablecoin integration
to be a question, is this a R and D project. Temporary thing, but it sounds like it's going to be a big part of that fabric.
Pet No, it's absolutely fabric.
So to give you some insight and how we think about these things, the guiding principle at the moment is we're going to partner with best breed technology. We're going to partner to accelerate ourselves into the market. There is a long, deliberate strategic roadmap and plan of building capability around digital asset. We're evolving into a digital asset payment company.
You know, this is fundamental for how we move things in treasury, the use cases, it puts consumer and essentially you can certainly see a day where all of them are movement moves on a USDPT coin you don't need to move feet around if you follow the train through. So this is absolutely foundational to what we do. It's not an R and D project. We're long past thinking about R and D and POC and testing here. We're
into the you know, of the fifty seven markets. We're going to launch a card which one and it's all fifty seven, like you know, we're having lots of interesting conversations around what's the first market we're going to try and then launch the rest. So it's very much a you know, we're going and doing this.
Now. There's lots of demand for the US dollar around the globe because it's the world reserve currency, but there are other large currencies like the euro. Are there plans to potentially create a euro version or whatever else?
So I'm European, so I mean, no, we're going to be US do now I'm joking. No, absolutely, So I think like part of the logic of calling it USDPT so PTB in payment token is that USD denomination can change to MX for Mexico.
Or ERK for Europe or whatever coin we choose.
The interoperability of that will be within our organization, and the ability to say, like we need a micro compliant European coin. The swap of that we can control. So you know, I can send you you're selling Spain, I'm signing in the US. I can send you USDPT and then you can decide don't want to hold US dollars in Spain, or I can just swap it to you
it becomes European PT. So what you're doing there is you're taking that traditional finance EFS currency marker moving into a stable coin layer, which is really just that fast transaction and that swap happens where you know, we would do the FX. We do FX today. We're actually quite good at FX, right, we do the FX and do the swap. What's interesting, you actually open some very interesting
user experience problems with stable coin movement. So if you take a use case where I think you spoke earlier, it was Ghana, Guyana. Ghana is a different place, ones in that time, ones in Africa, yes, so when you send currency there. So if I was to send my mum today money to the UK, and I send the US dollars, you know, bless her, she's a nurse in her seventies. She's like, what am I going to do with dollars? Like, I don't want dollars, It's not going
to be helpful. So actually, and the user experienced sending that USDPT and holding it and then being able to represent the local currency in the UI. But this is what US dollars is worth in GBP today is really interesting because you've got to do that based on where they are in the local currency before they tap the cards. So it's it's opens some interesting thinking and challenging around what is the local user seeing they're holding dollars. They want to hold dollars, but they want to see that
local rate. And if I spend on my card, I want to know my coffee was, you know, three pesos, not you know, a dollar seventy. So it's kind of it's going to be an interesting consumer test here of how they accept spending the US dollars. Do they eventually go away from local currency and I don't think they do and don't know the local currency and governments don't want to hurt that.
So and speaking of the user experience, so will Western
¶ How USDPT will be used
Union present this stable coin in the forefront of using their Western Union app or website or will they just be running in behind the scenes, or you know, maybe that may change over time.
It's going to change over time. Certainly, if you take the standard users we have today and I have today their money transmitted users, they don't, they're not. Some of
them are crypto native, so we can't be generalized. So some a crypto native, some are crypto users, but the majority are I'm sending money for a purpose and I want to send I'm going to give you dollars and it's going to pair as pesos on the other side, and what I want to know is the fee, the FX rate and what am I telling my loved one or the person I'm sending to how much they're getting so they can walk into store and getting it. So USDPT is going to be in the background, it's not
going to sit in the forefront of those users. The receiver, though, the person getting the fund is going to be on the forefront. So when you get that funding message, which is you know, either or WhatsApp or a text message or a Nomini channel message saying you have money from Malcolm, then you have the opportunity to say, well, I'm going to go and walk in and get my cash, or I'm going to get a USDPT stable card. I'm going
to hold it in USDPT on my visa card. I'm going to go through the process to get that visa card and then I can tap wherever I need to go. So the sender is not going to see it, but the receiver is absolutely going to see it. So again that's down to the use case of where the users are needing it and kind of filling that need versus let's just put it on the front end, let's put it all over the place, like we're being very deliberate. Over time, that's going to change. And again, it's a
journey we're on. We're not doing this as a R and D project, So the journey will get us there when the users get.
There, that's incredible. And then are your plans to offer a yield? A stable corn yield is a big thing, especially in the United it's big debate happening right now with the banks.
It's going to be loyalty based.
So I think there is a little bit of grayness. So if my legal friend was sat here, he'd be burning through me with his eyes right now about how I'm going to answer this because I have a very different opinion than the legal opinion. So there is a lot of grayness in offering yield, I think in europit so no, no, you know, in certain parts of the world they've already been very explicit about it. You can't share yield, you can't share you know, you can't share
yield for holding. So hold my coin for thirty days, or hold ten thousand coin, and I'll give you yield. That's been done for me. It's about loyalty and it's about giving usage loyalty, which we do today. So if you use x number of money transmissions, will give you x benefit for doing it. So if you use the card x amount of times, will give you your points against ju sage. You know, we'll give you one percent cash backs.
So that's a normal market construct that exists today. We will follow that same construct as opposed to saying explicitly you'll hold the coin for ten days and we'll give you share of yield. I think that gets into the security is it's a security holding model, and we want to avoid that.
As best you can.
Oh, yeah, absolutely, especially Look, we have the Genius Act pass here in the United States, but across the globe, legislation is still being worked out in different countries and jurisdiction, so you kind of have to wait to see.
Right, Yeah, And that's where you go back to what is commonly acceptable, like cash back is a commonly acceptable thing, like usage. You know, if you send X, you get free usage of X. It's very much a construct. But I think it's interesting you talk about why is stable coin valuable versus other currencies or cryptos. I think you've got that peg of one to one and it's always worth whatever one you put in.
So in this instance US dollars.
People don't want to get paid in something they're not sure about. So if I'm a gig worker in pick a country, India and I'm working for a US employment company, I kind of get paid in the US dollars easily. I don't have an account to do that, but they can pay me in crypto. So paying me in a coin or a value that I know is worth one dollars to one dollar that I can exit is actually valuable. They don't want to get paid in air miles. They don't want to get paid in stuff that really isn't
quantifiable and could change. You know, they can then turn that into bitcoin.
Or want to really wish.
But really that's where these interesting use cases go later on. So you know, the construct of future roamap of how do I create what would be a normal direct deposit account or a bank account now is a digital wallet where you can get your salary paid into that in a stable coin you can trust that you can exit locally. That changes that traditional finance to digital finance. That's a very different constructor banking right now, that's the same thing
like your bank. You get your money in there, they give you a mortgage and things. Well, get my money into my digital wire, I can move it globally quickly. Stuff to pay my mortgage, of course, But that's kind of an interesting place where I see these things becoming more native in that space.
Oh absolutely. Let's talk about how USDPT is compliant with
¶ Genius Act compliance
the Genius Act and the requirements of reserves and how that all functions be kind of seeds.
Yeah, so we again partner first. So we're leveraging Anchorage Digital Bank. So Anchorage are an OCC bank and very much as you would expect if you're in this space. If you're not, i'll explain it slightly. So the reserve works, you know, we deposit and Anchorage, we mint the coin directly in Anchorage, and then that coin becomes available in the exchanges through the market makers. We use it our treasury and then we could use it for use cases.
So they're an OCC Genius compliant bank. Genius Compliant is genius, don't you know. They don't give you a compliance tag. They give you we have no challenge here. So our coin has a no challenge on it, which means it fits within the Genius framework regulation. So that's how we stay complining. I think others have got pre approvals of compliants, so the paxoses and others in the space have So
that's really how you can ensure that adoption. I think some are going to have to change their business models slightly now. I know some give big yields or shared on holding coins. Again, they'll just call that loyalty at some point, or they'll call it cash back. Like they'll figure out a way. Maybe they'll listen to this and just be like, what is quite a cash back now?
So who knows. But yeah, So that's how we remain and we stay within that compliance piece, and that frameworks important because again we're a regulated entity through money transmit. We're regulated entity in you know, many countries, we have banks, we own banks in Europe and some parts of NATAM. So we want to remain in regulatory framework in pretty
much all we do. So the Genius Act gives us that box and framework that says, hey, if you behave in this framework and stay within it, then you're in a regulatory bounds.
Which is a good thing.
So again Genius Act was a catalyst for us to accelerate this stuff. Versus if you didn't exist. You're always wondering what the regulator might do, investing time in people like myself and others. Regulator comes in, it's like stables now a security. You're like, oh great, now we're an R and D project. Good job.
So that's that's important, Malcolm.
¶ Stablecoins in payments
Do you see this model of what Western is doing as a future of payments Let's say ten years from now. Stable coins are powering the rails, right, and the end user may not know, but in certain instances, like how Western Union is saying, hey, you can do it on the you want to use the card or whatever it may be, this is the model.
I think. My answer is a lean towards yes.
I think so, And why I'm not one hundred percent yes is because we've it's very hard to make those predictions. I think again, if you take the construct that a stable coin is the speed of global movement and it provides that one to one security, then everything is lining up well to say, yes, this is going to be the payment and how payments in the future are going to move.
Here banks remain their remain.
Token assets, their remain local market banks have difficulty because the central banks moving to global models quickly, whereas payment companies can they can ride across those global models. So we can ride banking rails in Europe, we can ride banking rails in Mexico, we can ride banking mails rails in the US, and then put that stable coin across the top of that. So as a user, you can
get the fast access to funding. And then you can dip into the local rail if you need it to go into a bank account and get changed in this currency. Or you can dip into the payment rail of visa to spend it. Or you can dip into a cash rail of Western unions get cash. So I believe, yes, this is the future of payments, that it will ride on top of a new layer, and you still dip into the traditional finance places to We still have to pay a mortgages, so we have to put something into
the bank to pay the mortgage. We still have to pay our phone bills, so our phone bills work on in most countries. You can go and pay it in person, but generally it's a digital transaction with a card. You still need cash to pay the market, so you still need cash. So I think all those three things still exist.
I think this just allows the money to move globally at and much quicker speed, and you're seeing some interesting payment and then you're seeing DeFi stuff coming in that now is becoming a bit more real.
So I do believe I'm leaning.
Towards yes, this is the way this will go, and a western union of the belief is that's how we're going to move things.
Like we will. You know, this is a digital part of our company. We have three parts.
We have your money in, money out, and digital, which is funds use. So this is how funds get used. So it's interesting.
A follow up question on what the end users say,
¶ Wallet usage
I send money to my cousin in another country and the options they get. Do you think it's necessarily for them to have some sort of Web three crypto wallet or it's not necessary because I'm already using the ecosystem that are app from.
I think it depends.
Look, consumers evolve quickly. They evolve in very interesting ways that you sometimes can't plan for. So I think in certain markets, having Web three crypto while this is going to be a thing. So for for me, the easiest way to solve that is be interoperable. So coin is improperable it's open. At some point, we'll support multiple wark chains. At some point we'll support multiple wallets. So if a user says, look, the only thing I need right now
is cash, they can go and get cash. I really need a card, I can get a card.
I really want to.
Move this and start investing in crypto. I want to start buying, or I want to start using it in web three use cases, So I want to start using it in DeFi I want to start using it in something else. Then the ability to move an into that and swap it for exchange or do those things that's there. So I think that's how you want to make things as utility based as possible in the background so the users can decide. And by the way we spoke about Solana and the way they've got their pods, I'm sure
they call it pods. If they don't, I'm going to get a phone call about this. They have their communities or pods where they drive out those use cases globally and what people do, the stuff that's going to come out of that. It's really hard to foresee what a community in Africa is going to do with a stable, instant digital currency in a use case that we possibly don't understand in the Western space, so being open and interoperable is going to be important for those things.
Oh yeah, you mentioned interoperable. That seems to be the name of the game because there's so many means and new chains could pop up.
Two vendors, some vendors, yeah, ten vendors for everything. It's interesting.
That must be a lot to manage to get all these partners and vendors on board.
It's it's a fun experience.
So we have a lot of inbound at the moment, a lot and a lot of conversations. But again, you just have to be open to we don't know everything. You're never going to know everything in this space. And you're spokes some organizations today that they're doing super interesting things that you're like, oh, actually, there's some opportunity here in this.
Region for that.
And you know, my view is you we're an open coin. If you want to use the USDPT to do that, that's great. The other thing, and the reason why we built our own coin is for the right partners and large institutions we work with, we can program that specifically for them, so you know, direct mints, so we can
guarantee one too. One direct burns and direct access to the small contract is something that we're willing to do in the right instances because unlike using the coin a third party coin where you don't control it and you're not sure what they're going to do in the future, we absolutely control the coin, which means we can determine how it goes and where it goes, and the regulatory frameworks of that versus a tether or USDC, which are just open market things that you know they're going to
do what's right for them. As a business, we have to do what's right for us. So it's an interesting again trying to be open, trying to create the shareable layers so that you can move into these things very quickly and really they become R and D projects if you like. So that's where you do your R and D at the very front.
Oh sure, yeah, you know. Earlier you mentioned that having a stable coin it helps to free up capital that
¶ Stablecoins free up capital
if I'm not mistaken, it's Nostril Vostro accounts to sit around the world where you have to have the pool of capital too. Yes, so that opens up kind of working capital for Western Union.
That's right.
So I can't give you the numbers because I don't remember them, but they're big. So if you think about our business, you know, take a holiday period where we have to pre fund our agents so they have cash and draw and so on a Friday, the treasury team will go work out through their treasury magic how much they need to prefund a country essentially for the capital usage and cash usage over that holiday weekend. So that
is capital parked. So you're buying currency, you're parking it there, and it sits there and it's left your business and it's set. And the percentage on that quite high. So now if you can say, okay, I'm not parking that anymore, I'm creating an agent white layer and you know, actually giving them a water moving and loading as they need or they're pulling and calling.
It's a very different business model.
So that operational efficiency not just in terms of how you move the funding, but in terms of the treasure is not going to lose his hair on a Friday afternoons she's trying to figure out how much or she's trying to figure out how much right down to the capital usage. So it does change the whole capitalization a part of that business as well.
Malcolm, the race is on. It seems like with even Western unions, competitors, banks, payment, different payment companies, everyone's trying to create their own stable coin using blockchain, tokenizing and much more. What's it like, you know, from your perspective to see the race and who's running in parallel with you.
It's interesting because I guess I don't look because you want to be You want to hope you're out in front, and you don't want to have a look behind you because you'll trip up. So that's kind of my very briteche view of the world. And there's not being in front of me. I'm the fastest at all. It's interesting. So you have you obviously, you have the other money remittance companies and the people in our space. They're all doing similar, not too similar things.
You know.
Some of them have gone a bit before us, some of them have gone after us. I think the use cases all become about the same. I think you have to leverage what you do as a fundamental business. So we have, you know, I mentioned it before, a huge retail business, four hundred thousand stores, so you're leveraging that with third parties. We have, you know, over one hundred and something million customers is where we can now issue
cards to that don't have them today. So really it's not about a race to who can do the first coin or who can do the first blockchain. It's who can furnish the first use cases. So if we can go to an emerging country and emerging space that is underbanked or nerve bank and give them digital visa cards that they can get funding to from loved ones, you've serviced.
The use case standard. They have a need.
They want to hold us dollars because the economic currency situation isn't great.
You've serviced a need versus we've got a coin on a blockchain. Yeah, let's go.
I don't think that's the race. The race is what am I users need? Where when do they need it? And can we service that need? Do we have to do it right now? So place like Venezuela they're opening up, it's very interesting space where they're already spending tether. They walk around with tether while it's they buy hot dogs in tether. I spoke to the local market people like we used to tether all the time, So giving us a stable card.
Is very interesting. That's in need.
So it's not about solana USDPT or what blockchain or which who's blockchain or this vendor that vendor. It's about how do I get a card in the hand of a venduel right now so they can get funding from the US family friends and live like It really comes down to that layer. How are you helping people live where they are not They're on a still on a blockchain and we've got USDPT.
They don't care, nobody cares. Nobody cares.
No. Well said for the end user, people who are going about their lives, it needs to work make their lives better, right. Yeah, there's a lot happening in a
¶ Tokenization market
tokenization market where you know, stable coins where the first example of tokenization, but folks are looking to put stocks in equities, gold and other commodities on chain. Is Western Union looking at any of that, any plans along those lines.
So we haven't started.
I think at some point we're an institution so tokenization, I think when your banking layer starts doing that, then you start doing it. So again, whilst we talk about the stable coin and the innovation how fast it's going, we're still a traditional company or over one hundred years old. We have banking institution relationships. So as they start tokenizing those assets and those investments in those commodities, then yeah,
we will start tokenizing that. But I think that's going to be more a push from the layer versus that's pushing down in the layer. I think that tokenization is incredibly interesting for those spaces like it just we smart contract tokenized years ago. It's really stable coins has become a big thing. The bank's like, we've got to do something. I worked in big banks, so you kind of know
how this goes. It's like, what are we doing in stable coin and they're like, well, we could do this, or we can tokenize the gold.
Well, it's tokenized the gold.
So it's a little bit of that going on. So I think, you know, again, overall, it's going to be driven by the institutional layer. I think that traditional finance layer is really going to drive that piece versus a payment layer. Where we sit clearly in the payment layer, which is where stable coin is the you know, the opportunity of innovation.
Oh absolutely, and you alluded to it earlier. Of the twenty four to seven market, we're seeing a lot of these exchanges and much more are looking to go twenty four to seven to match crypto, which I would say they started it all. Crypto has started all right, so how are you. I don't know if that changes your businesses at all, because Western Union has.
Been I think it's funny I walked past, so again I had the great opportunity this weekend, I'm actually taking some vacation time and getting away from the horrible.
Snow in New York.
And it's interesting because I must have walked past number of money exchange places on the High Street in Columbia and they're all closed. So what was super interesting was it's a Sunday afternoon at six pm, and every single one of them's closed. So in the cash world, there's still a nine to five mentality. We spend twenty four
to seven. So this is another opportunity to say the use case when I send money to a friend in Columbia on a Sunday at seven o'clock and everything's closed because retails closed on a Sunday afternoon because people lives. They need to spend it now, they need to do something now. That's why I think the stable coin with the cards or the digitizations go to somewhere else or spend somewhere else or bill pay somewhere else. That really creates that twenty four seven layer. I think that twenty
four seven layer has some maturing to do. Cash layer.
Cash is king in a lot of places.
Let's yes, you know that's still going to be the case, but there are instances, and they're growing instances of where you really do need cash outside of those layered hours. So yeah, I think it's it's going to be an interesting evolution for sure.
A brave new world markets going twenty four to seven payments, all these things.
Right, yeah, I think so it just means we get less sleep, you know.
So on a note, you know, with the advance of AI, you know, are you looking at it? You know how that can assist in certain ways.
I want to announce we're doing an AI stable coin. Both puts words together. No, AI is interesting.
So I think you could you can spend two hours talking about R and its own and the evolution and humanoid robots, and it's it's going to be awesome.
It's going to be great. It's nothing's going to go wrong.
I think AI just adds to that speed of movement, so you know, you get agentic bots, you know or origentic agents working on your behalf doing things. So you know you say that, hey, I'm going on vacation, sit and wait till the flight gets the cheapest, or sit and wait until these hotels in these areas at this start, and these are my five options. Get the right place, or I get my last points and do these things on my behalf. They happen automatically twenty four to seven.
So I think you're getting to faster commerce. You're getting to fast the decision.
Certainly.
Now I think you're not researching and Google anymore. You're researching in the AI. And so the next evolution there is I've researched, I've found what I want. I now purchase. So if you think about your natural flow in a Google aura, pick your search engine, and you're like, I found what I want and I'm going to go to a site I'm going to purchase. I think that natural flow just goes through that process and then it comes down to do I have the funds to do it?
How do I get those funds? So in our instance, we're in the Western space, it's in our account. In other instances, you know, these are needs things like my heat is broken. I need one right now? How do I get that? Well, you send me money for my heater. You can pay that automatically through where it needs to go in the product to arrive. So I think it
all starts tying together and it's just speed. It's going to get driven by speed that those natural hops are just going to get faster and they're going to close and you're going to get recommendations at some point, just like you did from Google, where you know it's listening and you get the fifty things you never wanted all the time, Like I didn't know I wanted that, but now I need it. That's that's happening. I think at some point. Oh yeah, that's going to.
Be quite scary, Yeah, for sure, because that's going to get quicker. Yeah, it's going to be.
It's almost inevitable, right, Yeah, it's just part of the course. What's on your road? Metfit is here for digital assets.
¶ Roadmap
Obviously the stable point is a huge one.
Yeah, So I think it's really my road maplik. I like simplification. So we have the three use cases, you know, bring those to the markets that they need to go to. So the treasury piece with the coin, you know, We've already started minting our first coins in treasury now, so it's well underway bringing that to market and really closing out some of those places where we park money today and actually removing some of that as a okay, where can we really make a big dent on our operational efficiency.
The second piece on the road map is really the stable cards, like how do we push those out, really driving some of that adoption and really getting you know, some of those users that are you know, the receiver side, leveraging those products, and then in the digital asset network, really growing those partners, like really helping them with their
own wallets and their adoption. So these assasas partners that have multiple wallets, multiple companies they serve, so really how do they convince those guys that cash is.
Real on the back.
So the roadmap issue is quite simply that and then building out the core capability in the company. So we're very much, unfortunately in a boring implementation phase. Itment's gone for me. It's like now we're trudging through the implantation and complying some legal meetings and the usual thing you would expect in a big organization. So it's quite a boring road map and Refrain twenty twenty seven. AI coins definitely, pagentic coins. Just find a buzzword, we'll figure it out.
So I think, you know, next year micro is obviously you're we have European banking licenses, so that's on the cards. You know, how do we do you know, is an mx PT a thing? Do we need to do a Mexican based coin. Mexico is a big remittance market for me, So it's really growing out that ecosystem even further into the next layers. I think be interesting. My DeFi gos are really keeping an eye on, you know, the communities and pods and people likes onnor and seeing what pops
out of there as things we can support. And then on the big corporate side, you're working with our big agents, so how do we help, you know, get liquidity moving between us and those things. So it's interesting that everyone wants USDC today we need to move to U SDC and like, okay, yes, you're.
Right, we do so well that's exciting. I mean, obviously you got to hit the ground running right to get all this implemented and get adoptions. So I'm excited. And you know, as things progress. I would love to have you back on to talk about it. I got some wrap up questions here for you. First, if you could
¶ Wrap up questions
create your own metaverse, will the theme.
Be so look for people who don't normally know.
I got this question and event so if you asked me without sending me, I would have got stumped. So I thought about this a little bit, and then I went into my personal life and I'm like, I think it would be quiet by design. So for me, I like simple utility of things. And I'm getting older, which means we're any more grumpies than Englishmen. So simple utility, you know, I walk around going why does it just not work? Why does that just not work? It used to just work. So quiet by design is kind of
interesting to me. Where you're constantly being hit, there's constant alerts for everything. And I think in our space when we're creating products and utilities, it has to be in the background.
It has to just work.
It has to be quiet and what it does and just be running the function of what you're doing. So a good example would be I really like the stable card, for example, not because we're building it, because of the fundamental thing of what it is It's just a very simple way to say I'm sending you money. You don't have to touch a thing if you say you want it on this card, it's just going to be a it's just going to appear. So you can send me a text saying, hey, happy birthday, sent you fifty bucks
and I know it's on this card. It's quiet by design. I get the interaction I want with you, and my money's there. That's that's the perfect metaverse for me. I don't have to do anything to touch anything.
It just works. It's quiet.
So I think it's that, and I thought long and hard about it. I'm like, yeah, I just want everything to be quiet as I'm getting older, you know, I ask somebody who's twenty five, like, I want noise on flashing lights, someone on the chin's going off on my phone every three minutes. But as yeah, as you get older, like, yeah, just piece and quiet would be nice.
I can totally relate to that. Rapid fire questions favorite food, hamburger, I do like my cheeseburg. A favorite musician or band.
I think, you know again, I'm a Manchester lad, so it's got to be the Stone roses Lean a little bit towards Oasis for the people who know what that is. For the American Stone Roses, you know that's my it's my era. That's the Manchester Boys. So yeah, it would be the Stone Roses, I'm afraid.
Very cool.
Favorite movie, Oh, Lock Stock and Two Smoking Barrels like very much.
That English.
Yeah, favorite book, favorite book. You know there's a Netflix show about it. It's the eleven sixty three. It's a Stephen King buck about a guy who goes back to stop the assassination of JFK. I read that years ago and they're just on the Netflix. A quiet for a short on Netflix. You should watch it. It's super interesting. I can't remember the actors in accept terrible that's this is the Old Brain coming in. Yeah, so that that
would be my favorite book. Like I'm not a big fan of horror books, but that was That was a very good buck in The Netflix show is really cool.
Oh, I have to check out both. I'm a fan of Stephen King bid. I have not heard of that and I would definitely watch on Netflix.
Yeah.
The other one is I caught it recently missed. The Mercedes is another Stephen King book that again, that's on Netflix. In Columbia I discovered because I loaded it, but not here another bad shout out for Netflix.
There we go.
But yeah, that I'm not a big Stephen King genre, but that seems to be the one that Sorys stuck from me. It's like, it was just a really interesting concept of if you went back and changed history, what would it be assassination of JFK? And then what would that look like? And it was quite dystrobian actually.
So very interesting. I love time travel movies and teens, so I'm fascinated by that. So I'll definitely check it out. And when you're not working, what are you doing for fun?
So I'm really getting into my pedal at the moment, a lot of moving tennis and padella and getting older so I can't play the big impact sports, so getting hit by a ball still doesn't hurt too much, So I do enjoy that. And then you know, I really enjoying my family. I have an awesome twelve year old and my wife. So traveling with those guys, really you've seen different parts of the world and how people live
and work and enjoy life. It's it's eye opening and I've had great opportunity to travel to a lot of places, so I'd encourage anyone to do that. Get off and go and see something. Oh, get off the pinging phone, go look at something.
Absolutely, experience life, experience different places.
Yeah again I sound like an old guy today. I'm definitely not having an old guide Malcolm.
Absolute pleasure. I love what Western Union is doing and I would love to do around too. No.
Absolutely, this has been great fun.
It's the first in person when I've done like this, so this is again we're getting back to in person.
Yeah, awesome.
Thank you so much, Thank you. I appreciate it.
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