The management of the Western Union Co. seems to believe that cryptocurrency transfers are not part of its near future, according to a statement expressed by its Chief Executive Officer, Hikmet Ersek.
Despite the increasing global popularity of the use of digital currencies, the CEO of the American financial giant that provides services of sending and receiving funds across the world is convinced that people would instead place their trust into solid, hard cash, MarketWatch reported.
Ersek imagines this is mostly because cash still is much more practical, usable than digital tokens.
“The consumers tell us what they want. People aren’t paying their hospital bills in cryptos,” Ersek said, addressing the participants of the Economic Club of New York on Wednesday morning.
Central Banks want Control
He also very much counts on central banks not being that eager to give up control over their local tender to make a move to a decentralized digital system just yet.
“Nations are built on flags, constitutions, borders and currencies,” Ersek said, adding that no central bank that is home to a reserve currency would want to give up on such power.
In December 2017, WU launched a campaign actively preventing their users from carrying out crypto-related transactions like using their service to send funds to crypto exchanges.
In February though, the people from Western Union said they were analyzing the potential advantages of using blockchain technology, testing transactions with the Ripple, owned by a San Francisco startup.
“We are looking especially in the processing settlement and working capital optimization, also in the regulation part, on the compliance part on the blockchain capabilities. And we do test, we do have some tests with Ripple.”
The Story of Decentralisation
Cryptocurrencies appeared in the wake of the 2007-09 financial crisis. The first decentralized cryptocurrency was Bitcoin, created in 2009 by Satoshi Nakamoto who in 2008 described the currency as “a peer-to-peer electronic cash system.”
“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority,” said Nakamoto in January 2009, on SourceForge.
The invention of bitcoin was followed by the creation of a large number of other, more-or-less successful digital currencies, such as litecoin, ethereum, and ripple.
The main advantage of using cryptocurrencies, according to their proponents, is a total lack of control of a government or central bank, i.e., a central authority, which would monitor and control the transactions and use of digital currencies.
The other advantages include anonymity, as transactions or accounts cannot be linked to your actual identity, followed by speed, security, freedom, as you don’t need anyone’s permission to use cryptocurrency.