MoneyGram International, a cross-border payments company, has partnered with Stellar Development Foundation, a non-profit organization behind the development of Stellar (XLM), a blockchain that facilitates cross-border transactions. The two will jointly speed up money transfers and payment arrangements. MoneyGram will integrate Stellar's network to enable cash financing and cryptocurrency payments in a variety of local currencies.
All of this will be done using USDC, a Circle-governed stablecoin and Coinbase via the Center consortium. USDC, according to MoneyGram CEO Alex Holmes, will enable a near real-time settlement process. Customers can now convert cash to and from USDC at MoneyGram locations, regardless of whether they have a bank account or not. United Texas Bank, based in Dallas, will act as the settlement bank between Circle and MoneyGram.
Notably, MoneyGram is one of the largest money transfer service providers in the world, allowing funds transfers to over 200 countries. By the end of this year, the company's new service will be rolled out in select areas. International expansion is planned for 2022. However, details such as pricing have yet to be specified.
"We are enabling consumers to link crypto assets and fiat currency," says Alex Holmes, president and CEO of MoneyGram International, "and we think we can be a pioneer and a leader in this opportunity."
Denelle Dixon, CEO and executive director of the Stellar Development Foundation, said many cash users would have access to crypto services that were previously out of reach.
MoneyGram and Stellar
What's remarkable about this partnership is that MoneyGram is now an ally of Stellar, Ripple's main competitor. Ripple and Stellar not only provide similar services, they also share a co-founder, Jed McCaleb.
Additionally, MoneyGram ended its partnership with Ripple in March. Their relationship escalated after Ripple was sued by the US Securities and Exchange Commission (SEC). Later in July, rumors about Stellar's potential acquisition of MoneyGram circulated, but neither have made an official comment on the matter.
Holmes, however, prefers not to classify his Stellar bond as a replacement, stating that Ripple's partnership was more focused on the backend.
That said, the event indicates increased interest from traditional payment networks to link cryptocurrencies and fiat. Visa itself piloted USDC transaction settlements on the Ethereum blockchain after joining forces with Crypto.com. Last week, the company outlined plans for a "Universal Payment Channel" (UPC). The UPC will connect multiple blockchain networks, thereby facilitating transactions between various central bank digital currencies (CBDCs) and stablecoins.
The value of XLM goes up
Following the announcement of the partnership, XLM gained nearly 14% as investors became more bullish on Stellar. XLM as of this writing is priced at $ 0,36 according to the quotation in real time. The digital asset currently has a market capitalization of $ 8,5 billion, and ranks 23rd in the cryptocurrency market.