Digital Currency Group DCG receives new investments from multiple companies, including Western Union

Western Union, whose business model is to transfer money but is now threatened by Bitcoin, recently became one of the latest investors in Digital Currency Group (DCG), an investment firm focused on Bitcoin and blockchain technology.

Does this mean an era of change is coming?

About DCG

DCG was founded in October 2015 and focuses on investments in the emerging Bitcoin and blockchain sectors. Currently, its investment portfolio covers 77 companies in 22 countries.

DCG currently has three subsidiaries, Genesis, Grayscale and CoinDesk. The company's CEO and founder is Barry Silbert.

DCG gets new investor

DCG has announced that they have recently gained new investors including Western Union, HCM International, Gibraltar Ventures, OMERS Ventures, Horizon Kinetics, Kingsbridge Wealth Management and Wood Investment Partners.

HCM International is the investment arm of Taiwan's Hon Hai Technology Group (Foxconn), while the Gibraltar joint venture is the investment arm of Britain's Prudential plc.

The wide range of investors shows that global businesses are aware of the potential of blockchain as a disruptive technology.

Add new consultant

DCG also added Glenn Hutchins, the head of AT&T and Nasdaq, and Lawrence Lenihan to its board.

Dr. Lawrence H. Summers and Gavin Andresen have joined DCG as senior advisors. Dr. Summers served as U.S. Treasury Secretary during President Clinton’s term. Gavin is one of the developers of the Bitcoin protocol and Chief Scientist of the Bitcoin Foundation.

DCG believes that these advisors are critical in increasing blockchain adoption and use by a wide range of end users.

Barry Silbert wrote in the DCG blog:

We are honored to have the support of so many outstanding investors and advisors and the trust of our portfolio companies and subsidiaries, who choose us not for capital, but for the opportunity to leverage our insights and network. The DCG family continues to grow. We are excited to continue to support and build meaningful businesses in the digital currency and distributed ledger space.

Western Union and blockchain investments

The amount of Western Union’s investment in DCG has not yet been disclosed.

Western Union is one of the world's largest money transfer companies, with more than 500,000 agents in 200 countries around the world. However, its money transfer business charges transfer fees as high as 10% for transfers of less than $50.

This business model is now facing challenges from new entrants that use the Bitcoin blockchain as the backbone for value transfer at lower costs than Western Union.

Companies like Western Union invest in companies using blockchain technology as a hedge - if blockchain technology is successful, then the value of Western Union's investment will increase, even though their enterprise value will decrease.

If blockchain technology begins to take hold, Western Union could also seek to acquire successful financial technology companies and integrate them to survive in this changing world.