Western Union CEO Hikmet Ersek is taking to Fortune.com to publish a three-part series on the topic of digital currencies and cross-border payments, and what he has to say may not come as a surprise as the leader of a top company in money remittences.
The current digital currency narrative, while certainly attractive to entrepreneurs, venture capital, and the media, is extremely “First World” in nature. And a primary question remains — do such innovations, as we know them today, address the needs of consumers and businesses on both sides of an international transaction? In its current form, the answer is no, but there’s potential, and that is something I am watching with great interest.
Ersek points out that conversation surrounding digital currencies hasn’t address concerns on those who are receiving payments:
Will the person receiving digital currency in a rural village in the Philippines be able to use it? Will the small or medium-sized enterprise have the technology capacity to spend, or transfer it? And most importantly, does the receive-side consumer or business actually want digital currency — if given the choice, would they prefer cash, or want the money in their bank accounts?
And while Ersek acknowledges that the technology behind digital currencies could be used as a “force for good”, he sees significant adoption taking place in first-world countries, not underdeveloped nations as some in the community have speculated might happen.
Consumer adoption is just one part of the digital currency story. Regulation and compliance issues also need to be addressed, and much work remains to be done in this regard. The conversation continues to evolve on a daily basis, and it may be a case of two steps forward, one step back, before we see formal regulation in place. But in the end, this is a path digital currencies must walk, before they can arrive, at scale, within the global payments business.
What do you think of Ersek’s opinion? Does he make any valid points?