The road to mainstreaming cryptocurrency adoption is being paved by Ripple with a $50 million stake in MoneyGram, one of the world’s most recognized and largest money transfer companies.
According to the press release, Ripple has closed an initial two-year partnership with MoneyGram to be their cross-border payment and foreign exchange settlement for digital assets. This comes with a $50 million commitment in exchange for equity through this term.
Ripple uses blockchain technology to provide a “frictionless experience” for business and individuals to send money globally. Banks and remittance providers can use Ripple’s digital asset, XRP to process customer payments almost instantaneously, anywhere in the world. With offices in San Francisco and New York, London, Mumbai, Singapore and Sydney, they are actively pursuing strategic partnerships to improve speed, efficiency and safety in the remittance market.
In cryptocurrency market capitalization, Ripple is only third to Bitcoin and Ethereum, with $18,292,597,153 in market cap, a 24-hour volume of $2,343,380,270 and 42,501,950,124 XRP in circulation at the time of writing this article.
In a statement, Brad Garlinghouse, CEO of Ripple has said, “This is a huge milestone in helping to transform cross-border payments and I look forward to a long-term, very strategic partnership between our companies.”
Founded in 1940 as Traveler’s Express Co., MoneyGram has been through its share of financial setbacks between securities investments backed by risky mortgages in 2008, selling majority shares to Goldman Sachs and Thomas H. Lee Partners for a cash infusion, and losing U.S. Bancorp to money transfer services rival, Western Union, all between 2007 and 2009, MoneyGram was hit again when their partnership fell through during Walmart’s restructure.
MoneyGram now operates with a $600 billion global remittance market to server more than 200 countries and territories. The pitfall with traditional foreign exchange markets is the advanced purchase of most currencies to support their settlement obligations. This partnership with Ripple intends to reduce costs, improve efficiencies and support settlement requirements.
Ripple’s xRapid product is a solution to liquidity and the reliance of pre-funding fiat currencies. Additionally, XRP transactions are quick with transaction fees at pennies on the dollar, compared to traditional transfer fees that can reach $30 per transaction and take 30 minutes or more to be processed.
“As the payments industry evolves and matures, it’s imperative that we continue to improve our platform and provide the most effective solution to get funds from point A to point B,” said Alex Holmes, MoneyGram Chairman and CEO. “Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.”
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