Traditional cross-border payments giant, MoneyGram is working with the Stellar blockchain network to create instant money transfers using the second most capitalized stablecoin, Circle’s USDC.
The announcement was made in a blogpost which stated, “MoneyGram International, Inc. (NASDAQ: MGI), the global leader in the evolution of digital P2P payments, today announced a partnership 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 announcement also explains that MoneyGram has integrated support allowing crypto wallets connected to the Stellar Network to access its global retail platform. It stated, “MoneyGram’s network, integrated with the Stellar blockchain and facilitated through Circle’s USD Coin (USDC), will enable cash funding and payout in local currency for consumers using USDC, as well as near-instant backend settlement capabilities.”
United Texas Bank has been announced as the settlement bank to complete the process within the regulatory framework. A Director of United Texas Bank, Scott N. Beck, said, “We are 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.”
What this means
With the advent of Bitcoin’s layer two solution called the Lightning Network, which allows for instant cash finality at zero cost on the Bitcoin blockchain, traditional cross-border payment services like MoneyGram and Western Union are having to worry about their future as these new technologies are giving them a run for their money. This is evident in El Salvador, where the government issued wallet, Chivo, has onboarded over 3 million citizens, which is almost half the country’s population in just 4 weeks.
You can expect that the trend of the adoption of blockchain and cryptocurrencies to continue on its bullish path especially now that United States Securities and Exchange Commission (SEC) boss Gary Gensler has made it clear that the financial watchdog does not have plans to ban cryptocurrencies in the country.
What they are saying
Alex Holmes, the chairman and CEO of MoneyGram said, “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.”
This also brings a newfound traction for the Steller Lumens blockchain and its native token, XLM, which is currently trading approximately 36 cents, up over 15% as of the time of this writing.