Western Union, an American based company that offers financial services across the globe has hinted to use cryptocurrencies to offer its services. This is a positive sign of the in roads that blockchain technology is having on the world.
Western Union Considering Using Cryptocurrencies
In a recent video interview with Reuters Plus, Odilon Almeida, the president of Western Union stated that the company has been evaluating the possibility of using cryptocurrencies to offer financial services to thousands of clients that rely on their services.
The company is looking at how they can revamp their services by using blockchain technology to streamline their processes. This giant financial service provider is also considering adopting cryptocurrencies and giving clients an option to exchange them for fiat currencies. Odilon, however, stated that such a major decision would only happen if it connects with a global audience.
During the interview, he also pointed out some of the challenges of using cryptocurrencies and questioned why they are yet to be adopted into the mainstream financial industry. Some of the challenges that he highlighted during the interview are compliance, volatility, and governance. These are the primary challenges that are hampering full growth of cryptocurrencies.
Stablecoins are in the process of resolving the volatility challenge by pegging themselves to recognized fiat currencies such as U.S dollar. The president of the company also stated that the company offers its services in 130 different currencies and have no problem adopting any new currency.
Note that in June this year, the company conducted a trial blockchain project whose main goal was to check the feasibility and application of the technology. When giving the final results of the project, the CEO Hikmet Ersek stated that the company did not notice any change in operating costs. The tests it has done so far has not resulted in substantial changes in efficiency. Hikmet also mentioned that practical application of blockchain technology is very expensive.
Asheesh Birla, the senior vice president of Ripple has also revealed that Western Union failed to see any significant cost saving benefits after using XRP to do ten different transactions. Asheesh added that the company could have noticed a drop in the costs if they tested with a large volume of transactions. Nonetheless, he is optimistic that Ripple will soon be used for cross-border payments even though financial service providers have been doing tests for several months now.
Western Union is receptive of blockchain technology and might decide to use the technology fully if the challenges highlighted such as volatility and governance are resolved amicably. More work and research needs to be done to streamline the technology and resolve the challenges.