MoneyGram International, one of the world’s leading cross-border transfer businesses, has teamed up with the Stellar blockchain to develop a stablecoin-based money transfer platform. Users of Stellar wallets will be able to send Circle’s USD Coin (USDC) to receivers who will be able to utilize the MoneyGram network to cash them out for their native fiat currency.
“We’re trying to be a bridge from the crypto world to the fiat world.”
MoneyGram CEO Alex Holmes said in an interview.
It is also in talks with third-party companies in El Salvador to offer digital wallets in addition to the Chivo wallets, which were released last year when the country made Bitcoin (BTC) legal tender. If it can reach an arrangement with one of these companies, it will be able to compete for BTC transfers.
MoneyGram praises El Salvador
“If a country like El Salvador is going to make Bitcoin seamless with US dollars in country, I think that consumers, through MoneyGram, should be able to transfer Bitcoin to El Salvador or transfer dollars and convert them to Bitcoin.”
Holmes spoke to Bloomberg
The decision comes as remittances become increasingly common in emerging economies, as well as heightened scrutiny of stablecoins that are supposed to maintain a 1-to-1 relationship with a commodity or currency like the US dollar.
Users with Stellar blockchain digital wallets will be able to convert their holdings to Circle Internet Financial’s USDC stablecoin once MG starts the service. The service can be used to convert the stablecoin to fiat currency.
MG has a previous deal with Ripple Labs, which previously held a large number of the company’s shares. Ripple and MoneyGram dissolved in March 2021, shortly after Ripple was sued by the Securities and Exchange Commission of the United States. A class-action lawsuit was filed against MoneyGram in March 2021 as a result of their partnership with Ripple.
In October 2021, MG and Stellar began working together, and a trial service was released in November. There had been speculations earlier in the summer that Stellar was interested in purchasing MoneyGram.