MoneyGram partnered with the Stellar after severing its ties with Ripple earlier this year, XLM up to 10%
Dallas-based money transfer company MoneyGram will partner with the Stellar blockchain (XLM) to develop a money transfer service via stablecoin USDC. So after taking a break from Ripple, MoneyGram decided to partner with their rival, Stellar.
— MoneyGram International (@MoneyGram) October 6, 2021
Ripple rival Stellar inks partnership with MoneyGram
According to a press release published on October 7, the Stellar Development Foundation, a Delaware nonprofit corporation that supports the development of the Stellar protocol, is partnering with MoneyGram to conduct a trial of the service in the fourth quarter of this year. By early 2022, MoneyGram intends to deploy this blockchain money transfer solution, helping to connect cryptocurrencies to more than 150 million global users.
The new service will allow users to convert between cash and USDC freely. Through the application of blockchain technology, the payment process on MoneyGram will take place instantly through stablecoin USDC.
This is expected to help increase the use and liquidity of cryptocurrencies and provide more ways for ordinary users to access the digital economy. The parties also expect the service scale to expand as more companies and wallets join the Stellar network.
XLM/USD 4-hour chart | Source: TradingView
XLM price reacted positively to the news, rallying nearly 10% to a fresh 24-hour high at $0.35.
However, the above tripartite agreement can be seen as a slap in the face of Ripple, Stellar’s crypto payments rival and a former partner of MoneyGram. In February 2021, MoneyGram announced its nearly two-year partnership with Ripple after the company was sued by the SEC for allegedly selling securities as XRP.
MoneyGram CEO Alex Holmes stated that the partnership agreement with Stellar is entirely different from Ripple. The company only uses Ripple’s ODL technology to process foreign exchange transactions instead of blockchain adoption on a large scale as large as consumer payments. The CEO also did not mention the legal problem that Ripple is facing.
In a related development, USDC stablecoin issuer Circle said on October 6 that the SEC is also being investigated, which will undoubtedly affect MoneyGram and Stellar’s payment development plans.
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