Bitcoin advocate and investor Barry Silbert has recently expressed his opinion on financial service firms Western Union and MoneyGram while he was interviewed by Entrepreneur at this year’s Inside Bitcoins conference in New York City.
“You should be able to move money and value instantaneously and it should basically be free,” he stated.
His opinion is that though leading players in the space currently have the opportunity to incorporate Bitcoin into their businesses, these two companies likely will not, which will eventually precipitate “a slow death.”
According to Silbert, these two large, old-school wire money transfer services will either adapt to Bitcoin as a payment protocol, turn into an entirely different line of business or run its course and die. He predicts that, most likely, they will fold and fade away forever.
“If they don’t adapt, they will be the Kodak of the next decade. Incumbents like these tend to not innovate. They get disrupted and decimated,” he said, pointing out that Kodak did not adequately adapt to the adoption of digital photography and ended up going bankrupt in 2012.
Transferring money to people outside of the U.S. using Western Union and MoneyGram is not cheap. Excessive fees are often heaped onto the amount transferred. Bitcoin, on the other hand, allows people to send money cross-border at a far lower cost, or “basically for no fee.”
It is no secret that Western Union is not in a hurry to get behind Bitcoin. The company’s CEO Hikmet Ersek has recently said on Bloomberg TV that the 163-year-old company would only consider accepting Bitcoin if it is “regulated and the customer wants it.” Concerning MoneyGram, it has yet to take an official position on the digital currency.
Barry Silbert is much more hopeful about a new breed of startups founded around the digital currency, of which he has personally invested in 48.
One of his favorites is Abra, a remittance service that uses blockchain technology in the backend so that users have no sense that Bitcoin is involved in each transfer.
Besides, he mentioned BitPesa, a company in Kenya that allows individuals and businesses to send money to and from Kenya and Tanzania. The service accepts Bitcoin from nearly anywhere in the world and exchange it for Kenyan and Tanzanian Shillings.
Moreover, he highlighted ChangeTip that allows users to give tips to their favorite bands or musicians on SoundCloud, and Coinbase.
Barry Silbert is the Founder and CEO of Secondmarket Holdings, Inc. He founded SecondMarket, Inc. in 2004 and serves as its CEO. He serves as an Advisor of SponsorHub, Inc. He is a frequent speaker at conferences on the topic of trading illiquid assets and has appeared in many leading publications, including The Wall Street Journal, Financial Times, New York Times, USA Today, BusinessWeek, Forbes and Fortune. He was featured on Bloomberg News, Fox Business News, Business News Network and TheStreet.com. He serves as the Chairman of Pluris Valuation Advisors, LLC. Silbert holds a B.B.A from the Goizueta Business School of Emory University.