Major money transfer company MoneyGram has entered into a strategic partnership with cryptocurrency firm Ripple, which doubles as the parent company of XRP cryptocurrency.
According to a press release on Twitter and an official announcement by both companies, the two firms will become partners in cross-border payments and foreign exchange settlements using the digital currency XRP. The two-year agreement will see Ripple pay $4.10 cents per share to acquire an 8-10% stake in MoneyGram; as well as an agreement to draw up to $50 million from Ripple in exchange for equity.
Further details show that MoneyGram will use Ripple’s xRapid product which allows money to be sent in one currency and instantly settled in the destination currency. Through the use of Ripple’s XRP token, xRapid is said to settle cross-border transactions faster than with fiat currencies.
Speaking on the benefits of this partnership, CEO of MoneyGram says:
Through Ripple’s xRapid product, we will have the ability to instantly settle funds from U.S dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.
Notably, following the Moneygram-Ripple partnership announcement, MoneyGram stocks increased by a huge 168% in characteristic response to the news.
The Ripple Advantage
For Ripple, the deal provides a great opportunity to make a case for its xRapid product; which allows you transfer XRP across borders instead of experiencing hassles with fiat money transfers.
Ripple Inc continues its partnership with major financial institutions. The company remains bullish with its “1000 times faster than any other currency” claims; for internal and international payments. The company says banks could use XRP as a form of bridge currency which will eliminate the need to deploy foreign bank accounts and cases of negative working capital.
Ripple has also announced partnerships with India’s Federal Bank (IFB) and a move into the Latin American market this month. Its XRP token is currently the third most valuable cryptocurrency after Bitcoin and Ethereum.
What do you think of this partnership? Do you hold any Ripple (XRP)?
DID YOU KNOW? Ripple had a trial partnership with Western Union which ended due to WU claims of not receiving significant savings from using the product. However, this new partnership seems set for a long term with Ripple CEO emphasizing the transformation of the product and with hundreds of partners now using XRP.