MoneyGram, the world’s largest money transfer company, has partnered with the Stellar Development Foundation, a non-profit devoted to the development of the Stellar blockchain, to allow clients to make cross-border payments using the USDC stablecoin. MoneyGram will benefit from lightning-fast payment settlement as a result of the cooperation.
MoneyGram will be able to use the Stellar blockchain’s native version of Circle’s USDC to transport funds worldwide considerably more swiftly. United Texas Bank will function as a settlement bank, completing the missing connection, according to the release.
The usage of the Stellar Blockchain means that the customer pays extremely minimal costs and has access to real venues where they can change USDC to cash and vice versa.
If everything goes well, the integration will be launched in a few regions by the end of this year, with an international deployment scheduled for 2022. There hasn’t been any word on price or anything like that as of yet.
MoneyGram announced a few months ago that customers in the United States will be able to withdraw bitcoin for cash at their kiosks.
What is a stablecoin, and how does it work?
A stablecoin is a form of cryptocurrency that is tied to a certain currency. In this scenario, USDC is tied to the US dollar. When trading USDC for dollars, it is said to as stable since there is no risk of fluctuation.
“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,” said Alex Holmes, chairman, and CEO of MoneyGram.
MoneyGram is no stranger to the usage of blockchain to improve payment efficiency. The Dallas-based firm collaborated with Ripple, an open-source distributed ledger system, in 2019 and implemented its On-Demand Liquidity (ODL) solution for foreign exchange, which employs the XRP cryptocurrency as an intermediary token. The contract also included a $50 million investment from Ripple at the time, however, the cooperation fell through because the US Securities and Exchange Commission initiated a lawsuit against Ripple, and the collaboration broke through after a few months due to uncertainties.