MoneyGram sells $50m stake to Ripple, will use XRP on its platform

The partnership will end the need to deploy foreign bank accounts, a reason why MoneyGram has a negative working capital

Ripple, the cryptocurrency company, has recently announced that it has teamed up with MoneyGram, a money transfer platform, in a partnership that will see MoneyGram’s services use digital currency XRP in day to day operations.

According to the terms stated in the deal, Ripple will pay $4.10 cents per share in order to acquire an 8% to 10% of stake in MoneyGram. In other words, Ripple is making an investment of $30 million and would be giving MoneyGram the option of additional cash infusion of $20 million in the next two years.

Apparently, the deal is going to provide Ripple with unparalleled opportunities to advocate the use of X-Rapid, a product which allows XRP transfer, it claims is superior in movement of money across borders. Ripple has long been against banks leaving money as collateral in foreign accounts and suggested the use of XRP in the form of bridge currency.

Brad Garlinghouse, CEO of Ripple said that the partnership will end the need to deploy foreign bank accounts, which is also the reason why MoneyGram has a negative working capital. The product will help smooth the treasury operations of customers, Garlinghouse added.

Reportedly, the investment in MoneyGram took place after its rival Western Union terminated a trial experiment with XRapid, stating that XRP transfer service did not produce any major savings. Despite being part of several pilot projects, XRP has not attained any breakout moment yet.

However, the CEO of Ripple claims that hundreds of partners have been using XRP in the recent months, with the implied value of the crypto being $18 billion, placing it as the third most valuable cryptocurrency after Ethereum and Bitcoin.

Citing reliable sources, Ripple is not going to secure a seat on the MoneyGram Board as of now but will attain the status of an observer.

 

Source Credit- http://fortune.com/2019/06/17/ripple-moneygram-xrp/