One of the world’s largest money transfer services, MoneyGram International, recently announced stepping into a partnership with Stellar Development Foundation, a non-profit organization that supports the development of the Stellar (XLM) blockchain.
The cross-border payments giant will integrate with the Stellar network to facilitate cash funding and payout in multiple fiat currencies, using USD Coin (USDC), according to MoneyGram’s official press release.
Fast, cheap, and seamless conversion
By enabling digital wallets connected to the Stellar network to access MoneyGram’s global retail platform, the new and “innovative agreement” will ensure a bridge between crypto and local currencies for consumers.
.@MoneyGram announces innovative agreement with the Stellar Development Foundation to utilize blockchain technology, providing a bridge between digital assets and local currencies for consumers https://t.co/E7NdfJctik
— Stellar (@StellarOrg) October 6, 2021
According to the press release, the partnership that is scheduled to go live in select markets in 2021, with a further international rollout planned for 2022, will “revolutionize settlement flows by facilitating near-instant settlement in USDC.”
Fully backed by the US dollar, USDC is the second-largest stablecoin by market cap, governed by Coinbase and Circle through the CENTRE consortium.
Initially developed on Ethereum (ETH), the stablecoin went live on Stellar earlier this year.
We and @circlepay are excited to announce that Stellar USDC is now live and immediately available on Stellar’s decentralized exchange, accessible to any Stellar account through integrated wallets, and tradable across Stellar’s ecosystem! https://t.co/jeARyW3Hhv
— Stellar (@StellarOrg) February 2, 2021
“Thanks to the reach of MoneyGram’s services and the speed and low cost of transactions on Stellar, a new segment of cash users will be able to convert their cash into and out of USDC, giving them access to fast and affordable digital asset services that may have previously been out of reach,” noted Denelle Dixon, CEO and Executive Director of the Stellar Development Foundation.
The partnership will boost both the utility and liquidity of the crypto while introducing it to 150 million of MoneyGram’s consumers.
According to the press release, United Texas Bank will act as a settlement bank between Circle and MoneyGram.
“We are pleased to play an integral part in completing the settlement process by working on this first of a kind direct USDC to USD settlement within a bank regulatory framework,” said Scott N. Beck, Director of United Texas Bank.
What about Ripple?
“As crypto and digital currencies rise in prominence, we’re especially optimistic about the potential of stablecoins as a method to streamline cross-border payments,” said Alex Holmes, MoneyGram Chairman, and CEO, underscoring the company’s expertise in global payments, blockchain, and compliance.
According to Forbes, while commenting on MoneyGram’s old partnership with Ripple (XRP), Holmes disagreed on characterizing the new agreement with Stellar as a replacement.
The deal with Ripple allowed MoneyGram to use the crypto company’s product for cross-border payment and foreign exchange settlement.
The partnership came to an end earlier in March after the US Securities and Exchange Commission (SEC) sued Ripple over a securities law violation.
According to Holmes, the partnership with Ripple “was much more focused on the backend,” while the new tie-up with the company’s chief competitor, Stellar, “is actually even more exciting because it brings the frontend consumer side to it.”
Jed McCaleb, the co-founder, and CTO of Stellar co-founded Ripple back in 2011 but parted ways with the company in 2014 over internal disagreements.
Shortly following his departure, McCaleb tried to dump all of his XRP, received as part of Ripple’s founding team, but was prevented from doing so by the rest of the company’s management.
In July, CryptoSlate reported on rumors of MoneyGram’s potential takeover by Stellar, less than six months after the money transfer services giant announced the end of its partnership with Ripple.
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