"Coexistence First"...Stablecoins and SWIFT, How Did Their Awkward Coexistence Begin?

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Stablecoins are shaking up the outdated payment speeds of the international remittance market. However, analysis suggests that SWIFT (Society for Worldwide Interbank Financial Telecommunication) remains a core infrastructure of the global banking network, making a coexistence inevitable.

According to crypto news outlet Cointelegraph on May 6 (local time), major global remittance companies are strengthening their digital asset strategies to find faster payment alternatives than existing bank payment networks. Western Union has launched the Solana (SOL)-based stablecoin USDPT in the Philippines and Bolivia, with plans to expand to additional markets by 2026.

Western Union CEO Devin McGranahan stated in the Q1 earnings announcement that the stablecoin would be used as an alternative payment layer to the decades-old SWIFT network. He explained that digital assets enable real-time on-chain movement and settlement between the company and its agents, and can reduce the problem of capital being tied up on weekends and holidays due to the traditional banking system only settling payments from Monday to Friday. Competitor MoneyGram also partnered with Kraken to announce a service allowing users to convert cryptocurrency into cash.

However, the prevailing view is that SWIFT is unlikely to disappear in the short term. Since its establishment in 1973, SWIFT has been deeply entrenched in cross-border payment infrastructure used by banks in over 200 countries and regions. SWIFT also embarked on blockchain-related infrastructure experiments last September, announcing a shared ledger initiative involving over 30 financial institutions. Bernardo Bilotta, CEO of stablecoin infrastructure platform Stables, stated, “SWIFT will not be replaced by a single announcement or a single stablecoin.”

The biggest advantage of stablecoins is their ability to reduce the locked capital of remittance companies. Bilotta explained that companies like Western Union pre-fund correspondent bank accounts in various parts of the world, using those funds to guarantee payments when remittances occur. He pointed out that this capital generates no profit beyond its role in guaranteeing payments 2-3 banking days later. While stablecoins can reduce settlement times from days to minutes, he added that they require reserves and real-time fund management, meaning that freed capital is not immediately fully deployed into other profitable activities.

Sota Watanabe, CEO of Startale Group, stated that the time delays in traditional financial networks also serve as safeguards, such as batch processing of transactions, offsetting exposures, and liquidity management centered around banking hours. He said, “Stablecoins eliminate that delay. While powerful, this means that fund management systems must now operate continuously, not just during business hours.”

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Concerns have also been raised that private stablecoins could create yet another closed payment network. Bilotta pointed out that while private payment networks like Western Union's USDPT are advantageous for issuance, fund management, and counterparty control, they could re-create the fragmentation that blockchain aimed to solve. Watanabe also warned that if each major payment company creates isolated payment networks, the siloed structure of correspondent banking infrastructure could be replicated on the blockchain. Cointelegraph reported that even if stablecoin-based remittances offer 24-hour settlement and improved speed, it is more likely they will work alongside SWIFT rather than replacing existing financial networks.

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