The announcement was made in a blogpost, stating that MoneyGram had partnered “with the Stellar Development Foundation, a non-profit organization that supports the development and growth of Stellar, an open-source public blockchain that allows money to be tokenized and transferred anywhere in the world.”
The partnership will allow digital wallets connected to the Stellar network to access MoneyGram’s global retail platform, providing a bridge between digital assets and local currencies for consumers. MoneyGram’s network, integrated with the Stellar blockchain and facilitated through USDC, will enable cash funding and payout in local currency for consumers using USDC, as well as near-instant backend settlement capabilities.
The partnership will also enable the seamless conversion of USDC to cash, or cash to USDC. “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. Given our expertise in global payments, blockchain, and compliance, we are extremely well-positioned to continue to be the leader in building bridges to connect digital currencies with local fiat currencies,” Alex Holmes, MoneyGram Chairman and CEO, said.
This partnership is remarkable for two reasons. First, it revolutionizes the settlement process. For the first time, settlement with MoneyGram will occur in near-real-time using USDC, the world’s fastest-growing dollar digital currency. This enables a faster collection of funds, improving efficiency and reducing risk.
The second reason is that MoneyGram has partnered with a major rival of Ripple, a former partner offering similar products for international payments. MoneyGram ended its relationship with Ripple in March of this year after Ripple was sued by the US Securities and Exchange Commission for selling the digital asset XRP, which Ripple developed as an unregistered security.
Denelle Dixon, Chief Executive Officer and Executive Director of the Stellar Development Foundation described the partnership as a “shining example of how blockchain technology and stablecoins bring new opportunities to global customers and enhance the existing financial system.”
“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. We’re pleased to team up with MoneyGram to drive toward our mission of creating more equitable financial access,” he said.
Jeremy Allaire, Co-founder, Chief Executive Officer, and Chairman of Circle added that “the launch of this partnership speaks to the power of digital currencies like USDC to create a fast, secure, and seamless settlement for the digital economy.” To him, MoneyGram and Circle, as well as the Stellar Development Foundation, are at the forefront of digital currency innovation.
MoneyGram is acclaimed for its several innovative partnerships that help consumers get access to digital currencies. The company continues to invest in initiatives related to digital currencies, and the integration with Stellar is the most recent in its journey to lead the evolution of digital peer-to-peer payments. (The Stellar network operates using XLM coins and currently has a price of $ 0.338 and a market capitalization of $ 7.8 billion.)
United Texas Bank has been appointed to serve as a settlement bank between Circle and MoneyGram. Scott N. Beck, Director of United Texas Bank said that the bank was “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.”
The service is scheduled to be available in selected markets by the end of this year and is planned for a further international rollout in 2022.