The MoneyGram International money transfer firm works with the Stellar blockchain to create a stablecoin-based money transfer platform. The new MoneyGram crypto transfer service will allow Stellar wallet users to send USDDC to recipients and cash it out in fiat through the MoneyGram network.
MoneyGram’s CEO Alex Holmes said the firm is in talks with third-party digital wallet vendors in El Salvador and government-backed Chivo wallets to complement its operations. If it can negotiate a deal with one of these firms, MoneyGram will finish BTC transactions.
According to Holmes, he wants to link the crypto and fiat realms as a money utopia in a Bloomberg interview.
MoneyGram Implements Crypto Payments
According to Holmes, if a country like El Salvador will make Bitcoin seamless with US dollars in-country, customers should be able to send Bitcoin to El Salvador or transfer dollars and convert them to Bitcoin through MoneyGram.
The benefits of this system, as Holmes sees it, are that Stellar can provide a cheaper and faster way to move money around the world than the existing banking infrastructure.
This is a big move for MoneyGram, which has been struggling to compete with the likes of Western Union.
It’s also a big win for Stellar, working hard to position itself as a go-to platform for financial institutions.
A Collaboration for the Future
Meanwhile, in October 2021, MoneyGram and Stellar began working together, launching a test service in November. Bloomberg reported that Stellar was interested in buying MoneyGram earlier that year.
The two companies have now officially announced their partnership, which will see MoneyGram use Stellar’s blockchain to power its new money transfer service.
The service will allow users to send USD Digital (USDD) – a stablecoin pegged to the US dollar – to recipients, who can then cash it out in fiat through the MoneyGram network.
According to the announcement, the service will initially be available in the US, with plans to roll it out to other countries in the future.
Previously, MoneyGram partnered with Ripple Labs, which owned a large amount of the firm’s stock. In March 2021, just after the US Securities and Exchange Commission sued Ripple, the two companies ended their relationship.
Ripple and MoneyGram were both sued in March 2021 as a result of their cooperation.