MoneyGram International Inc. (MGI:NASDAQ) announced in a press release on June 17 a $30 million investment from Ripple that “will enable MoneyGram to utilize Ripple’s xRapid product, leveraging XRP in foreign exchange settlement as part of MoneyGram’s cross-border payment process.”
As one of the world’s largest money transfer companies, this marks a serious move to bring the benefits of blockchain technology to cross-border payments. The company notes, “Today, MoneyGram relies on traditional foreign exchange markets to meet its settlement obligations, which require advance purchases of most currencies. Through this strategic partnership, MoneyGram will be able to settle key currencies and match the timing of funding with its settlement requirements, reducing operating costs, working capital needs and improving earnings and free cash flow.”
Additional benefits of Ripple’s cryptocurrency technology include very low transaction fees and speedy transaction times. The Ripple team explains, “XRP remains the most efficient digital asset for settlement with transaction fees at just fractions of a penny, compared to other digital asset fees of about $30 per transaction. Similarly, the average transaction time for XRP is two to three seconds with other top digital assets ranging from 15 minutes to an hour.”
MoneyGram shares closed at $1.45 on June 17 to then open at $3.66 the following morning, up an astounding 152% overnight.
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