MoneyGram will use XRP cryptocurrency and receive up to $ 50 million investment from Ripple
Crypto company Ripple this Monday announced the start of cooperation with the money transfer platform MoneyGram, writes Fortune. Ripple intends to invest up to $ 50 million in MoneyGram. At the same time, MoneyGram agreed to use XRP cryptocurrency in its main business..
Under the agreement, Ripple will acquire from 8 to 10 percent of MoneyGram shares at $ 4.10 per unit, which is equivalent to an investment of $ 30 million. In addition, MoneyGram is given the opportunity to receive an additional $ 20 million over the next two years.
“For San Francisco-based Ripple, this deal opens up an unprecedented opportunity to use a product called xRapid, which allows transfers using the XRP cryptocurrency. Ripple has long insisted that banks should use XRP as an intermediate currency instead of leaving money as collateral in overseas accounts, ”writes Fortune.
“This solution eliminates the need to open accounts with foreign banks. Thanks to him, MoneyGram will have a negative working capital, and clients will have access to simplified settlements, ”said Ripple CEO Brad Garlinghouse.
MoneyGram announced the start of testing xRapid about a year ago. The company subsequently reported that its trials failed to produce convincing results in the context of cost savings. Garlinghouse says the situation has changed in recent months, with hundreds of partners now using XRP. According to him, over time, XRP gained significant liquidity, which made it possible to eliminate the risks of an asset caused by volatility, while financial companies can make their transfers using cryptocurrency in a matter of seconds..
The investment from Ripple will help MoneyGram recover its recent losses. The crypto company agreed to this deal with a significant overpayment – at the close of trading, MoneyGram was quoted today at $ 1.49.
XRP rate jumped by 7% after the news was published.
MoneyGram is represented in more than 200 countries around the world, where it has over 347,000 service points.
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