XRP Gains 5% as Ripple Forms Strategic Partnership with MoneyGram; Last Resort for Both Firms?


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XRP Gains 5% as Ripple Forms Strategic Partnership with MoneyGram; Last Resort for Both Firms?

Ripple bought a share issue from MoneyGram worth $30 million at $4.10 per share to acquire 8-10% of the company. MoneyGram would also have an option of infusing another $20 million over the next two years. A strategic partnership will now ensue where Ripple will become the critical service provider for cross-border payment and foreign exchange settlement using digital assets.

The digital asset they will be leveraging is Ripple, using Ripple’s xRapid Product. This partnership is a massive step towards the vision with which Ripple began, and investors put money is XRP.

Also Read: Ripple Fathers’ Day Gift Propels It Past $0.4400 as Bulls Return

Until now, MoneyGram has had to use banking services to provide settlements for payments they initiate. Due to the difference in time of settling payments, MoneyGram has to take loans to increase the required liquidity. However, by deploying xRapid, they will now be able to leverage XRP’s liquidity to provide cheaper and faster settlements.

MoneyGram Chairman and CEO, Alex Holmes noted,

“Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.”

MoneyGram reported a net loss of $24 million in 2018 compared to a net loss of $29.8 million for the fourth quarter of 2017. The money transmitting service provider has been working towards developing, and 2019 will be part of the roadmap. Hence, the success of this strategic partnership is crucial for MoneyGram.

Also Read: Bitcoin Vs Facebook Coin: Should Bitcoin Hodlers Care About Facebook Coin?

Currently, MoneyGram works independently by leveraging money from banks. Ripple CEO Brad Garlinghouse told the media

“This will eliminate the need to deploy foreign bank accounts. That’s why MoneyGram has negative working capital. It will help customers and also smooth out their treasury operations,”

XRPUSD
XRP/USD 4-Hour Chart on Bitstamp (TradingView)

Moreover, while XRP recorded gains around 5%, it rose from $0.43 to a reach high at $0.46. Notably, a partnership like this back in 2016 or 2017 would have likely propelled the price by 30%.

This can be attributed to an apparent decrease in the use case for MoneyGram itself. Digital payment is quickly becoming more accessible than ever with major firms working on implementing or integrating digital currencies on their respective platforms. Facebook is the most prominent example of it.

Do you think MoneyGram and Ripple will be able to increase their volume and user base in the current environment? Please share your views with us. 

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XRP Gains 5% as Ripple Forms Strategic Partnership with MoneyGram; Last Resort for Both Firms?
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XRP Gains 5% as Ripple Forms Strategic Partnership with MoneyGram; Last Resort for Both Firms?
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Ripple bought a share issue from MoneyGram worth $30 million at $4.10 per share to acquire 8-10% of the company. MoneyGram would also have an option of infusing another $20 million over the next two years.
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Disclaimer The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Author: Nivesh Rustgi

Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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Nivesh Rustgi 528 Articles

Nivesh from Engineering Background is a full-time Crypto Journalist at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

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