It’s not day by day you get to listen to from the CTO of a monetary incumbent who has truly mined bitcoin.
So, curiosity was excessive as David Thompson of worldwide remittance big Western Union took the stage at MoneyConf 2017 in Madrid, Spain. And he didn’t disappoint, dealing with the digital currency difficulty head on.
“Customers have been asking us if digital currency goes to wipe out the remittance enterprise,” he stated.
According to the CTO, the reply is not any. Thompson revealed cash-based transactions are on the rise in lots of Western Union’s creating nation markets. And anyway, he added, “the regulators are actually pushing again on digital currencies due to the anonymity.”
It could come as a shock, subsequently, that Western Union is trialing an integration with digital currency change Coinbase, wherein Western Union will seem throughout the internet app of the change.
In dialog with CoinDesk, Thompson revealed that the challenge entered into improvement final fall, and is at the moment being piloted with Western Union workers. No launch date has been set, however an announcement might be forthcoming.
Thompson pressured, nonetheless, that it’s going to not be for digital currency transactions, however as a substitute, on the back-end for fiat transfers.
“Until digital currencies grow to be regulated and built-in into the legislation, we aren’t going to incorporate that on the platform. Our regulators are fairly direct with us; it’s not one thing they’re [allowing us] to allow.”
Thompson went on to element different blockchain developments the remittance firm is engaged on.
After a pilot with Ripple a number of years in the past didn’t work out (there was apparently not broad sufficient adoption amongst banks), the workforce has continued to research doable use circumstances for the expertise. One that is compelling is utilizing blockchain to standardize financial institution integrations (Western Union’s app at the moment integrates with about 2 billion financial institution accounts), Thompson stated.
But, maybe one of many use circumstances with probably the most quick impact on Western Union’s backside line is blockchain’s doable function in streamlining compliance. Thompson revealed that Western Union is engaged on a blockchain-based know-your-customer (KYC) compliance pilot, specializing in bringing down its hefty compliance prices, which at the moment attain roughly $240m a yr.
In addition, Thompson stated, Western Union is investigating how the expertise will be leveraged for real-time settlement, built-in sensible contracts for import/export transactions and various cost varieties. Could the choice cost varieties sooner or later embody digital currencies? Thompson conceded which will occur “over time as changes are made in regulation around the world”.
While non-committal, Western Union does seem like preparing for that day.
And as digital currency regulation advances, and assuming the combination goes easily with Coinbase’s platform, the remittance firm can be in a robust place to bridge the hole between incumbent monetary companies and various shops of worth.
Disclosure: CoinDesk is a subsidiary of DCG, which has an possession stake in Coinbase.
Image by Noelle Acheson for CoinDesk