MoneyGram Partners with Stellar (XLM) for Transfer Wallet

MoneyGram International, one of the largest cross-border payment service providers globally, has announced a strategic deal with the Stellar blockchain. The deal involves creating a platform for stablecoins that will facilitate money transfers.

MoneyGram and Stellar have been working together since last year. Before working with Stellar, MoneyGram previously worked with Ripple but halted the partnership because of the lawsuit filed against Ripple and its executives by the United States Securities and Exchange Commission.

MoneyGram to set up stablecoin transfer platform with Stellar

MoneyGram is partnering with Stellar to create a money transfer platform based on stablecoins. With this new service, it will be possible for users of the Stellar wallet to send the USDC stablecoin to the intended recipients. The recipients can later cash out the stablecoins for fiat currency using MoneyGram.

In a recent interview with Bloomberg, the CEO of MoneyGram, Alex Holmes, said that MoneyGram wanted to bridge the cryptocurrency sector and the fiat world. Holmes also added that MoneyGram was also holding talks with third-party firms that provide digital wallets in El Salvador.

When El Salvador adopted Bitcoin as legal tender in September last year, the government rolled out the Chivo wallet that could be used to hold the Bitcoin used for transactions. The wallet is widely used in El Salvador by both merchants and customers. MoneyGram seeks deals with such companies to position itself as one of the top firms facilitating Bitcoin transfers.

“If a country like El Salvador is going to make Bitcoin seamless with US dollars in country, I think that consumers, through MoneyGram, should be able to transfer Bitcoin to El Salvador or transfer dollars and convert them top Bitcoin,” Holmes added.

He also said that it was best to embrace Bitcoin because it seemed to be where the world was headed. With the immense opportunities in the cryptocurrency sector, it was important that the company position itself as one of the top money transfer platforms that can bridge both the fiat and crypto sectors.

As mentioned earlier, MoneyGram had secured a previous deal with Ripple Labs. The deal between Ripple and MoneyGram was halted in March last year after the SEC filed a lawsuit against the company over the sale of unregistered securities. The partnership between MoneyGram and Ripple resulted in a class-action lawsuit being filed against the company in March last year.

Around six months after MoneyGram severed its ties with Ripple, it partnered with Stellar. The pilot phase for the partnership was launched in November. Towards the end of last year, various reports said that Stellar wanted to takeover MoneyGram.

The growing use of cryptocurrencies

Cryptocurrencies have become increasingly popular over the past year. Since the beginning of the year, there has been a notable decline in cryptocurrency prices, but this has not severed the adoption of these assets.

Besides El Salvador, the Central African Republic also accepts the use of Bitcoin as legal tender. The country recently passed the Bitcoin law, creating an opportunity for cross-border payment service providers that want to tap into this new audience.

Russia could also be bracing for the use of cryptocurrencies for international payments. Government officials in the country have proposed using cryptocurrencies to facilitate international payments. Following the Western sanctions imposed against Russia, including being cut off from the SWIFT system, the country is searching for ways to resume international trade.

With these arising use cases for cryptocurrencies, cross-border payment service providers are best positioned to expand their services in the cryptocurrency sector.

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