The future of the payment hub in a multi-rail world

The debate about whether stablecoins belong in banking is over.

The question now is how they fit into a bank’s existing infrastructure.  

You may have seen the news: “Western Union launches its own stablecoin.” 

It would be easy to dismiss this as just another press release. But it is not what most headlines suggest. 

Yes, there is a consumer angle. Western Union has flagged a spending product, “Stable by Western Union,” landing in 40+ countries in 2026. 

But that’s not the part that matters here. The interesting move is buried in the back end: Western Union is changing how money is funded and settled in markets where it’s difficult to access dollars through the normal channels. 

It’s the clearest illustration so far of where stablecoins could be headed, and what that means for the future of correspondent banking. 

What’s the play?

The traditional flow works like this: someone in the UK sends money to a recipient in Manila. Before the recipient can collect anything, Western Union has to ensure the Manila agent has been pre-funded with dollars.

That funding moves via Swift and correspondent banks, which is a comparatively slow, expensive, and difficult process in countries where USD access through the banking system is limited. 

The new way changes this process. Western Union mints USDPT (a regulated digital dollar issued by Anchorage, the first federally chartered crypto bank in the US, operating under the GENIUS Act framework), sends it instantly, and burns it once it has been converted back to local currency. This skips the spaghetti junction of correspondent banks in between. 

There are big advantages here: near-instant settlement, 24/7 availability, and much lower transaction costs compared to traditional correspondent banking. 

USDPT moves on Solana (a blockchain) to agent wallets managed via Dynamic (a wallet infrastructure provider), with Fireblocks (a digital asset custody and settlement platform) providing the underlying treasury, custody, and settlement infrastructure. 

At the destination, the agent submits USDPT to a licensed exchange for conversion against local currency at a prevailing or pre-locked rate, depending on the arrangement. That agent — or the exchange they’re tied to — must be a regulated entity in the destination country to perform this conversion legally. 

Stablecoins stay under the hood

The customer experience is completely unchanged: they still walk in and walk out with pesos. But the funding is much faster and cheaper, and the finance team’s reconciliation workflow stays the same because the reporting wraps in standard Swift MT940/MT942 formats. 

The harder it is to access dollars through correspondent banking, the more obvious the value of a stablecoin alternative becomes. Western Union picked Bolivia and the Philippines because that is where the existing rails struggle most. 

This isn’t unique to Western Union. Canada’s Wealthsimple and Visa recently piloted stablecoins to test money movement between financial institutions and payment networks using USDC. Again, there’s no change at the user level and no requirement to hold a digital balance.  

The food delivery company DoorDash has partnered with Tempo, a blockchain, to pilot stablecoin-powered payouts for delivery workers and merchants across 40 countries. The workers who opt in don’t need to open a crypto wallet or think about stablecoins at all. The complexity sits in the rail, not the experience. It’s early-stage by DoorDash’s own admission, but the design intent is the same; keep the stablecoin out of the user’s way. 

What connects all three examples is the same design principle: stablecoins are a settlement layer, not a product. The customer sees nothing. It’s the back-end that improves. 

Co-opetition

So the whole ‘stablecoins versus banks’ framing is collapsing. What’s emerging instead is regulated banks becoming the foundation stablecoins are built on. Rather than being in competition, banks provide the layer of trust that the whole model depends on.  

Banks provide the regulated reserves, the licences, and the deposit base. Stablecoin infrastructure handles the movement layer.  

Western Union’s decision to plug into Anchorage and Solana rather than build its own private chain is a great example. Anchorage (the regulated entity) provides trust; Solana (the blockchain) provides the settlement speed. 

This has important implications for non-USD stablecoins. Before, very few people wanted to hold them. USD is preferred because it protects people in countries with volatile currencies from inflation and exchange rate swings. But that logic only applies if you need to hold the coin. A Philippine peso stablecoin doesn’t need to be held. It only needs to exist for three seconds in the middle of a payment. 

Take the same Western Union corridor in reverse. A provider receives Philippine pesos, mints a PHP stablecoin against the deposit, swaps it to USDPT in an on-chain liquidity pool, and off-ramps to dollars at the destination. The local stablecoin is transactional. It’s a bridge.  

Liquidity pools for most non-USD currencies are thin or nonexistent. If this model is going to scale, that gap will have to close. Once it does, the economics change entirely.  

Where do payment hubs fit in this new world? 

Banks are already running multiple payment rails — Swift, Faster Payments, BACS, CHAPS, SEPA Instant, SEPA Direct Debit — and most have invested significantly in orchestrating them through a centralized payment hub. You might think that the payment hub becomes less relevant as digital asset rails emerge. 

It won’t. In fact, it becomes more relevant for three main reasons: 

1. Operational readiness – Digital asset settlement requires the 24/7 infrastructure used for instant payments.Things like always-on core systems, real-time sanction screening, and continuous processing.Banks thatofferinstant payments alreadyhave the infrastructure in place for stablecoins.
2. Orchestration – The payment hub already routes instructions across rails, manages scheme rules, and handles exception processing. Adding stablecoin or CBDC(Central Bank Digital Currency)settlement is an extension of that function. If your hub can route a SEPA Instant payment today, it can, in principle, route a tokenized deposit settlement tomorrow. The orchestration logic is the same.
3. The settlement asset itself – Today, a payment hub moves instructions around. It tells money where to go but assumes the money itself will follow in the usual way, through the usual channels. In a multi-rail world, that assumption breaks down. The same payment might need to be settled in tokenized deposits, a CBDC, or a stablecoin, depending on the corridor, the counterparty, or the cost. 

These aren’t interchangeable. Each carries different credit risk, legal status, and finality. The payment hub evolves in this world. Instead of just routing instructions, it becomes the orchestration layer, the place where settlement mode selection, rail choice, and cost optimization happen. Not because it’s the only way, but because someone has to hold the logic, and the hub already sits at the centre of that ecosytem.

What about high-value payments?

Every example above — Western Union, Wealthsimple, DoorDash — involves high-volume, repetitive, low-to-mid value payments. 

For large-value Treasury and institutional payments, the picture is different. Big payments need greater scrutiny.  

Treasury teams want to verify the rail because they can’t trust that it is working invisibly. So, settlement finality must be unambiguous. A Treasury function moving $500 million will not accept ‘it settled on-chain’ as sufficient confirmation without robust audit trails and legal certainty. 

For these flows, the more likely near-term path is tokenized deposits on permissioned networks. JPMorgan’s Kinexys (formerly JPM Coin) is a good example: a large-value settlement within a fully regulated, bank-controlled framework.

The practical implication for payment hub strategy is a segmentation:

• Stablecoins and CBDC for high-volume, lower-value, speed-sensitive flows 
• Tokenised deposits on permissioned ledgers for large-value, scrutiny-sensitive, institutional flows
• The hub needs to route across both

Where do payment hub vendors stand today? 

There’s a clear strategic case for hubs absorbing digital asset rails. But we’re not quite there yet. Most of the leading payment hub vendors are making announcements and launching pilots rather than production deployments. 

The vendors who have moved furthest (Finastra GPP, FIS, ACI, Fiserv, Bottomline) have done so primarily through Circle partnerships or their own stablecoin issuance, and almost exclusively on the USD stablecoin side. Tokenized deposits — the format most relevant to European and UK banks — remain largely at the research and positioning stage across the board. 

This gap is both a risk and an opportunity. A hub vendor in Europe, for example, that is not yet ready to support tokenized deposit settlement is not ready for the direction European regulators are pushing. But the window to influence vendor roadmaps, and to structure commercial arrangements that lock in capability ahead of demand, is open now. 

So, what’s next?

The ‘stablecoins versus banks’ framing is giving way to a model in which regulated banks provide the trust layer and stablecoin infrastructure provides the movement layer. 

For banks, you must understand how to position your payment hub as the orchestration layer for a world in which the settlement asset becomes a variable that needs to be routed intelligently. 

The vendors are moving, but most are not there yet.  

Start thinking about this now, while vendor roadmaps are still being shaped. You’ll be much better positioned than those who wait for a turnkey solution to arrive. 

Get ready for stablecoins

If the debate is over, you should be thinking about how digital assets fit into your infrastructure.

RedCompass Labs can help with that journey, get in touch now.