Telegraphic money: New rails, same logic

Western Union was a booming business in the 1860s. Its national network of telegraph wires carried the news, urgent messages, and birthday greetings. Its ticker-tape machines delivered quotes from the New York Stock Exchange to brokerages across the country — and, after the closing bell, sports scores. Railroads used it to keep their trains from colliding. Jewelers and clockmakers paid to receive the precise time.

Sending money, however, was an afterthought. 

As the story goes, sometime in the late 1860s, a man in Chicago needed to get $200 to New Orleans faster than the week or so it would take to send from a bank. So he walked into his local Western Union office with an idea: He would give them the cash in Chicago, and they would telegram their New Orleans office to pay out the same amount on the other end. 

The office initially declined — Western Union did wire money, he was told, but only for employees; moving money was too risky to provide as a public service. But the man pleaded his case with the office superintendent, who finally relented on the condition that the sender assumed all risk of loss himself. 

“The money reached its destination in safety,” The New York Advertiser reported, “and thus the business of sending telegraphic money orders was fairly begun.”

Western Union launched its Money Transfer service in 1871, by which time it had offices in almost every train station in America and many Main Streets — if a town had, say, 1,500 people, it probably had a Western Union, too.

Importantly, each of those offices had a ready pool of cash from the money people brought in to send telegrams.

This made for fast payments: To “wire” money to someone was simply the process of bringing cash to one Western Union office and having the recipient retrieve the same amount of money from another. 

The time it took to send someone money fell from days to minutes. 

It also expanded the time in which money could be sent — because Western Union didn’t keep banking hours. Offices located in train stations, for example, were open whenever trains were running, which was most of the time. In big cities, money could be sent close to 24/7.

Additionally, neither the sender nor the recipient needed to have an account with Western Union. Just cash on one end and an ID on the other.

Sending money with Western Union was safe, too. Messages were encrypted to prevent them from being intercepted by someone tapping the telegraph wire. The sender could also stipulate that, in addition to ID, the recipient’s identity “be vouched for by someone known to the operator.” 

In 1873, Western Union sent $2 million across its wires with only $110 of mistakes.

So Western Union was right to declare in its annual report of that year that its system of sending money “is the best that can be devised.” 

154 years later, every other Western Union business is gone — no one pays for the precise time anymore, and sports scores don’t travel by telegraph.

But money transfers have survived, because banks have never fully resolved the underlying problems they have sending money.

Bank transfers often require multiple hops. Siloed ledgers have to be synchronized. Reconciliation happens just once a day. Banks are closed nights and weekends. 

As a result, bank transfers sometimes take just as long in 2026 as they did when Western Union first improved the experience of sending money in 1871. 

Now, though, stablecoins are improving on Western Union — by putting their same system on blockchain rails.

Blockchains solve the same problem the telegraph once did: slow bank payments. And they do it using the same logic: a unified ledger. 

Western Union and stablecoin issuers offer basically the same service: Both are effectively narrow banks, and neither is restricted to banking hours.

This gives them an edge in payments: While banks are designed to create and store money, Western Union and stablecoins are designed to move it.

Both do so faster than banks.

For Western Union, money moved as fast as a telegraph message, with settlement happening as soon as the recipient arrived at an office to pick up their money. 

But stablecoin issuers do this one better: With stablecoins, the message is money. As soon as the onchain message is received, the transfer is complete.

Western Union, however, retains one significant advantage: They send dollars. Stablecoins, by contrast, are only a claim on dollars.

Soon, though, Western Union will be sending stablecoins, too. Their United States Dollar Payment Token (USDPT) is expected to launch soon.

Why adopt the new competition? The press release announcing USDPT notes that “access to cash remains localized.”

Western Union aims to change that by turning its 550,000 offices into off-ramps for stablecoins — the place where people go to turn stablecoins into cash, much like they used to go to railway stations to send it.

Creating its own stablecoin allows Western Union to control the ledger, too, cutting banks out of the payments business entirely.

In short, it’s the 1871 playbook all over again.

Could it work?

There are a lot of stablecoins, so it’s hard to say.

But whatever happens with USDPT, the history of Western Union suggests we’re at the beginning of a once-in-a-century shift in how money moves.

— Byron Gilliam

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