Key Takeaways
- In order to speed up transactions, Moneygram will use a variant of USDC running on the Stellar network.
- Moneygram's relationship with Ripple shows it's ready to move on from its past mistakes.
- Both parties agreed to reevaluate their relationship once the SEC issue was resolved.
With its latest foray into the blockchain space, international remittance provider MoneyGram is attempting to establish a foothold in the emerging technology.
On October 6, 2021, the business announced a new collaboration with the Stellar Foundation to create a payments bridge that simplifies money transfers and allows near-instant settlement in USDC, a stablecoin linked to the U.S. dollar produced by Circle and backed by the Stellar Foundation.
Moneygram's creative vision is highlighted in the statement, which was published only a few hours ago, with the company claiming that the collaboration "will transform settlement flows."
According to the Press Release, Moneygram would utilize a version of USDC that operated on the Stellar blockchain in order to improve the efficiency of transactions.
United Texas Bank will act as a settlement bank between Circle (the issuer of the USDC) and MoneyGram, among other parties (remittance service provider).
This would be Moneygram's second effort to use blockchain technology to enhance the quality of its service.
Founded when Jed McCaleb, a co-founder of Ripple, decided to leave the business due to philosophical disagreements and dedicate himself completely to the development of his own project, Stellar has emerged as a direct rival to the cryptocurrency exchange.
As a result, Stellar Lumens (XLM), the native token of Stellar, saw a significant increase, ending the day with a 12 percent or more gain, which was driven in part by Bitcoin's remarkable performance throughout the day.
XLM began the day at $0.31 and ended the day at $0.357, with a daily high of $0.364 and a low of $0.31.
Moneygram's stock, on the other hand, was more cautious. After a rapid slide from its annual high in July, the firm only managed to record a 0.9 percent increase in earnings, moving from $7.6 to $7.69, with no signs of a trend reversal in sight.
Moneygram's decision to work with Ripple is a clear indication that the company intends to move ahead and put the negative experience it had with Ripple behind it.
Moneygram and Ripple established a collaboration in January of this year.
For international remittances, Moneygram would utilize the RippleNet as part of the exchange settlement process.
Moneygram would also get financial incentives in the form of XRP, in return for granting Ripple an ownership interest in the business.
The collaboration, which lasted almost two years, came to an end in March 2021 when the Securities and Exchange Commission (SEC) officially launched legal action against Ripple, accusing the company of utilizing XRP as a means to create securities that were not registered with the SEC.
In an official statement, Ripple said that the decision to separate was reached in consultation with the community.
Following the resolution of the SEC case, both parties agreed to review their business partnership in the future.
With the work we were able to do in such a short period of time, we are particularly pleased with the effect we were able to have on the industry by delivering this first-of-its-kind product to the market.
We handled billions of dollars in transactions via RippleNet and On-Demand Liquidity as a team (ODL).
Nevertheless, with the entry of Stellar into the fray, it is possible that Moneygram will no longer be willing to wait for Ripple to fulfill its objective of being a blockchain-friendly company.
Are you excited to see the Moneygram and Ripple collaboration results?
