Visa Cryptocurrency Partners

MoneyGram Partners With Ripple Competitor Stellar, Will Settle Transactions With USDC Stablecoin

MoneyGram Partners With Ripple Competitor Stellar, Will Settle Transactions With USDC Stablecoin
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MoneyGram International, Inc. , one of the world’s largest money transfer services, is partnering with the Stellar Development Foundation, a non-profit organization that supports the development of Stellar, a blockchain network that facilitates cross-border transactions. The Stellar network uses XLM to operate, which is currently priced at $0.327 with a market capitalization of $7.8 billion.

Through the partnership, the MoneyGram network will integrate with the Stellar blockchain to enable cash financing and payments in multiple currencies, be it the US dollar or Japanese yen, using USD Coin (USDC), a stablecoin governed by Coinbase and Circle through the hub consortium, according to Daniel Dixon, CEO. and Executive Director of the Stellar Development Foundation. Initially developed on the Ethereum blockchain, USD Coin was launched on Stellar in February.

Customers will be able to transfer cash into and out of USDC for instant pickup at MoneyGram locations. On the backend, the Dallas-based United Texas Bank that is insured by the Federal Insurance Corporation (FDIC) will facilitate settlement between Circle and MoneyGram. The service is set to launch in select markets by the end of this year, with further international rollouts planned in 2022, although no additional details, including pricing, have been shared.

“We empower consumers to connect crypto assets and fiat currency, and we believe we can pioneer and lead in this opportunity,” says Alex Holmes, Chairman and CEO of MoneyGram International.

What’s important, Dixon notes, is that an entire segment of cash users will gain access to cryptocurrency services that might previously have been out of reach. “You can bring your money to one of the MoneyGram sites and bring it to the blockchain, and you don’t have to have a bank account to do that,” explains Dixon. The same is true if you do not have a bank account to withdraw your assets from the blockchain like Stellar. [Now] You can do this by going to the MoneyGram website and collecting your money from there.”

The partnership is also noteworthy because MoneyGram is now allied with a major competitor to its former partner Ripple, which offers a similar product for international payments. In fact, one of the founders of Stellar, Jed McCaleb is a co-founder of Ripple who came in at number 377 on this year’s Forbes 400 list of the richest Americans by virtue of its $3 billion in XRP, the original asset of the namesake XRP Ledger, a blockchain used by Ripple. Rumors about a possible acquisition of MoneyGram by Stellar began in July (both declined to comment on the matter), less than six months after the money transfer services company announced the end of its partnership with Ripple.

The relationship ended in March after the US Securities and Exchange Commission filed a lawsuit against Ripple, which accused the company of selling the XRP digital asset, developed by Ripple, as an unregistered security.

Holmes disagrees with the characterization of Stellar’s link as an alternative, saying that the partnership with Ripple “was more focused on the backend.” “I think that’s actually more exciting because it brings the consumer front side to it,” he presumes.

In addition, the initiative indicates a growing interest from traditional payment networks to link fiat currencies and digital currencies. In March, Visa piloted US dollar transaction settlement on the Ethereum blockchain with its partner Crypto.com, and last week it outlined a plan for what it calls a “Universal Payment Channel” (UPC), which connects multiple blockchain networks to facilitate transactions between various stablecoins and altcoins. Central Bank Digital (CBDCs).

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