For many in the bitcoin industry, Western Union is the epitome of everything that's wrong with traditional finance – one might say it's the Blockbuster Video of a financial world that is on the verge of a Netflix solution.
Published last week as part of a release of more than 3,700 comments that included big-name brands like Amazon and Walmart, it was Western Union's submission that perhaps drew the most attention and scrutiny, with some critics calling attention to language that was allegedly anti-competitive, and by extension, anti-bitcoin.
Though some passages would seem to support this notion at first glance, legal experts working in the bitcoin space largely disagreed with the interpretation of the community at large.
While the surveyed legal experts agreed Western Union is certainly viewing developments in the bitcoin ecosystem through the lens of its own business interests, they suggested the filing shows it is seeking to prepare for the technology, should it prove more beneficial to its business model.
Fair playing field
Fuerst Ittleman David & Joseph, PL attorney Andrew Ittleman echoed Santori's remarks, stating that while larger companies will commonly use regulatory processes to burden smaller competitors, Western Union's filing shows little evidence that it is looking to engage in such behavior.
Ittleman suggested that big corporations will typically argue for tighter regulation, making the case that in the absence of such rulemaking, they might not have the same incentive to provide their products and services to consumers.
"Western Union's is different," Ittleman said. "I think that the tone that Western Union takes is for the most part reasonable, and I don't think it shows on the part of Western Union some sort of intention to destroy the burgeoning virtual currency industry."
attorney Aaron Kaplan posited that part of the filing can be read to suggest that Western Union may be interested in partnering with the industry.
In particular, he points to the following section, which reads:
Kaplan said that this section further suggests Western Union may also be considering how it could "offer a compliance type service to virtual currency licensees", while additional portions imply it could use bitcoin to fund money transfers.
More opportunity than threat
Perhaps the most visible lightning rod in the filing for the community has been the perception that Western Union wants the government to approve every bitcoin ATM location, as the machines are popularly viewed as a way to encourage new customers to the ecosystem.
However, to Kaplan, this part of the response actually suggests Western Union wants to clarify whether its existing agent network can become "NYDFS-approved locations for virtual currency kiosks".
Kaplan suggested that Western Union may be hinting at how it could leverage the size of its operations to deploy the technology, should it become more widely used, while pointing out the positives and negatives of this interpretation.
"Where do you think those approved locations will be?" he asked. "Companies like Western Union with its more than 500,000 agent locations and existing infrastructure ‘approved’ as locations for bitcoin ATMs are definitely anti-competitive."
One source, who declined to be named in the report, remarked that other parts of the response suggest Western Union sees bitcoin as "more of an opportunity than a threat".
"You see a number of things that suggest if the world does move in this direction of blockchain-based frameworks, what would make this unworkable for us? If we found ourselves going down that path, what things would we want to nip in the bud now if we found ourselves doing that in the medium to long term?" he said.
In regards to Western Union's call for clarity on the use of kiosks, the source added, "I saw that as a defensive service."
Still, not everyone believes that the filing finds Western Union playing nice with the bitcoin industry.
Kaplan, in particular, is at odds with his colleagues in viewing the filing as a positive sign for bitcoin as a whole, saying it did "nothing to promote innovation in the bitcoin industry".
"It essentially tries to have the bitcoin industry conform to the business that Western Union is in, the traditional MSB business," he said, adding that such businesses should be allowed to have a flexible regulatory environment in which to mature.
Kaplan also pointed to what he called Western Union's bid to remain except from BitLicense registration, as a sign that it is looking for a competitive edge over new competition.
Ultimately, Kaplan called on regulators to help ensure that companies like Western Union aren't able to block the new industry from blooming, voicing his belief that federal regulation is needed to preempt many varied state laws.
"Such a federal regulatory regime will allow and foster the growth of the bitcoin industry both domestically and internationally," Kaplan continued. "Comparatively, Western Union’s approach is the same old wine in the same old bottle."
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