Western Union won’t make the same mistake with Blockchain

Digital Currency Group is an investment firm founded in March 2015, by prolific Angel Investor Barry Silbert. The company has invested in 72 different companies, more than two-thirds of which operate in the bitcoin space.

In the last four months alone, the company acquired the biggest bitcoin news site, CoinDesk, and along with it, the biggest bitcoin conference, Consensus. The company already had investments in Bitpay, the industries leading payment service provider, as well as coinbase and Kraken, two of the largest platforms for trading bitcoin.

“I wanted to work with firms who have a long-term perspective, and were willing to explore with us and invest not only money, but real organizational and intellectual capital into building businesses and partnerships that will enable us to unleash value in new, unprecedented ways,” states Silbert.

“Being structured as a company, versus a fund, allows us to evolve with the industry given our permanent capital base and flexible mandate…It is our view that broad exposure with the optionality to concentrate our focus is a winning strategy.”
— – Barry Silbert, Digital Currency Insights Founder and CEO

In October last year, DCG raised an undisclosed amount of capital in a round that included MasterCard. Silbert recently announced that DCG has been onboarding a new group of investors, including Western Union.

Formerly the Telegraph Company, Western Union had an industrialized monopoly over the telegraph industry in the late 19th century, and is famous for refusing to purchase Alexander Graham Bell’s phone patent in 1876, for US$100,000.

Western Union appear determined not to repeat their mistakes. The company’s vision is to be a global leader in cross-currency, cross-border money movement & payment services, continuing to meet consumer and business needs as they develop.

At the Inside Bitcoin Conference in New York last year, Silbert compared Western Union to Kodak in the mid 90s. “Kodak saw digital cameras coming along, I believe it was the CEO made the comment that no one would be able to afford a multi-thousand dollar digital camera, so we’re not worried and ultimately Kodak went out of business and went bankrupt.”

The global remittance giant was in discussions with Ripple Labs early last year, regarding a blockchain pilot project, although details still remain scarce. By using a cheap payment network, proponents claim that companies will be able to cut down the cost of remittances.

“If you look at Western Union and Moneygram, they have a fantastic opportunity to take advantage of bitcoin as a financial rail and incorporate it into their business.”
— – Silbert

As of December 31,2015, Western Union services were offered through a combined network of over 500,000 agent locations, in 200 countries and territories, and over 100,000 ATMs and kiosks. The company completed 262 million consumer transactions, moving US$82 billion.

Vice President of Marketing and Communications at Ripple Labs, Monica Long, stated that, “Financial institutions and networks use Ripple as a technology that powers real-time settlement in any currency to lower the cost of liquidity and compliance. Ripple was created to enable an Internet of Value in which the world can move value as easily as information moves today.”

In addition to onboarding new investors, Silbert also announced new board members and advisors joining DCG in their campaign to incubate and nurture new businesses.

“We realize that our vision is broad and ambitious; to that effect, we are honored to be guided by the experience and wisdom of new members of our board and advisory team who will help us realize the vision for Digital Currency Group.”

• Silbert

Glenn Hutchins has joined the Board of Directors. Among his many current roles, Hutchins is currently Chairman of North Island and a Co-Founder of Silver Lake, which he started in 1999.; Director of both AT&T and Nasdaq, Inc.; a director of the Federal Reserve Bank of New York;  and Vice chairman of both the Brookings Institution and the Economic Club of New York.

“Digital Currency Group (DCG) has positioned itself as a key participant in the Bitcoin universe, a space which has the promise to be one of the most innovative sectors of today’s technology ecosystem. Bitcoin technology has the potential, among many other impacts, to transform the global payments system and DCG aims to be a central force in the transformation,” said Hutchins.

Gavin Andresen will be serving as a Senior Advisor. Andresen is currently with the MIT Digital Currency Initiative, and one of the bitcoin protocol developers. He was the lead developer for several years after the anonymous creator of bitcoin, Satoshi Nakamoto, stepped back.

“The addition of these advisors underscores the importance of the various stakeholders DCG feels will be critical to helping digital currencies and their applications reach a broad group of users and achieve mainstream adoption.”
— – Silbert