International money-transfer giant MoneyGram has entered into an agreement with the Stellar Development Foundation – a non-profit organization dedicated to developing the Stellar blockchain, to allow customers to make cross-border payments with the USDC stablecoin . This collaboration also ensures lightning-quick settlement of payments for MoneyGram.
With this, MoneyGram will be able to leverage Circle’s USDC native version on the Stellar blockchain to more quickly move funds internationally. According to the announcement, United Texas Bank will act as a settlement bank to fill in the missing link. The use of the Stellar blockchain in this process ensures very low fees for the consumer and access to physical locations to convert USDC into cash and vice versa.
Integration is expected to begin in some markets by the end of this year, with an international rollout planned in 2022 if things work out well. For now, there’s no comment on pricing and the like.
The collaboration comes within months of MoneyGram announcing that consumers can now withdraw cryptocurrency for cash at its kiosks in the US.
What is a stablecoin?
A stablecoin is essentially a type of cryptocurrency that is pegged to a specific currency. USDC, in this case, is pegged to the US dollar. The reason it is referred to as ‘stable’ is because there is no risk of volatility when exchanging USDC for dollars.
“As crypto and digital currencies grow in prominence, we are particularly optimistic about the potential of stablecoins to streamline cross-border payments,” said Alex Holmes, Chairman and CEO of MoneyGram.
MoneyGram is no stranger to the use of blockchain for liquidity of payments. In early 2019, the Dallas-based company partnered with Ripple, an open-source distributed ledger system, and adopted its On-Demand Liquidity (ODL) solution for Forex, which uses the XRP cryptocurrency as an intermediate coin. Uses up. The deal also included a $50 million investment from Ripple at the time, but cooperation fell through a few months due to uncertainty after the US Securities and Exchange Commission filed a lawsuit against Ripple.
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