Western Union: Cryptos Aren’t Replacing Dollars Soon
Hikmet Ersek, CEO of Western Union (WU), has said that the company will not be offering cryptocurrency transfers in the near future.
“Nations are built on flags, constitutions, borders and currencies… The consumers tell us what they want. People aren’t paying their hospital bills in cryptos,” he said in a speech at the Economic Club of New York.
Ersek added that Western Union’s customers are far more inclined to use fiat currency than cryptos as they prefer having tangible cash.
This is especially true in countries where could be described as “cash-only” economies, where most corner stores and even some supermarkets do not accept debit card payments. People used to paying with tangible cash (FIAT) rarely transition to something digital unless they have a gateway.
Admittedly, cryptocurrencies are not user-friendly for now for people unfamiliar with online digital purchases. It is even harder to wrap one’s head around the difference between a blockchain and a banking institution.
Ersek also said that fiat currencies are more favorable option for central banks, which would be highly unlikely to shift to decentralized digital currencies.
Central banks prefer dealing in currencies whose flow they can control, directing the economy during emergencies and preventing bank runs. This is why Schweizerische Nationalbank, Switzerland’s central bank, was skeptical about introducing a cryptocurrency of its own. Even with control over the asset, it would have to act as a commercial bank, in its own words, possibly even aggravating any bank runs.
On the other hand, we can see the Bank of England, which submitted a report concluding that the idea of central bank-issued cryptocurrencies isn’t as gloomy a prospect as Sweizerische Nationalbank argues.
WU itself was experimenting with XRP in the past, possibly using it as a potential vehicle for remittance processing. Perhaps the company’s view on cryptocurrencies is more nuanced than Ersek let on.