Western Union, the global money transfer leader says it is ready for digital currencies. The company is not entirely new to cryptocurrencies as it has been testing Ripple, an international technology payment for months.
In a recent announcement, the company indicated that it is equipped to incorporate digital currencies, as it views them like any other currencies.
In view of the potential that blockchain and cryptocurrencies have in business, Western Union sees their eventual use as possible alternatives. Existing resources that the company has, like billions of client accounts, a global network of retail outlets and its existing digital transfer of fiat are likely to make it successful.
At the same time, Western Union's decision to incorporate digital currencies in its services is likely to have a positive impact on the cryptocurrency industry. Transactions are currently considered slow and expensive but integration of blockchain technology will resolve these issues. But beyond this, adoption of cryptocurrencies by major companies such as Western Union will alter the way cross border payments are done significantly.
LDJ Capital Managing Director, William Davis says, "Mobile payments passed the global $1trillion dollar mark in 2016. As peer to peer lending and global trade grows, crypto payments will augment if not reshape the payment landscape allowing a new barter type mechanism that very often is preferred by purchasers particularly in industries with digital goods and existing virtual currencies."
The cryptocurrency sector has not developed fully, it continues to experience several of implementation hurdles. Wide acceptance, stability and compliance are major challenges that stand in the way of widespread adoption. For cryptocurrencies to go mainstream, more businesses will need to accept cryptocurrencies as a mode of payment. Currently, digital currencies are only being used by a small population across the globe.
Digital currencies need to stabilize if investors are going to view them as a probable means of payment. Countries have to fix regulations to facilitate cross-border payments. This will widen the scope, allowing different players to participate and facilitating acceptable transaction standards.
Though this may look like a huge task for money transfer companies, further development and widespread use of virtual currencies and blockchain is not a far fetched idea. Their potential continues to grow and their use cases are on the rise. Western Union is confident in its ability to incorporate digital currencies and this may just be the first step towards mass adoption of cryptocurrencies globally.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.