Over the years, the crypto ecosystem has forged many links with traditional finance. A situation that continues to evolve with new partnerships every day, like the one announced by the giant MoneyGram with the Stellar network.
An alliance with the Stellar Foundation
MoneyGram is a company specialized in international money transfers. This one was until now known in the crypto ecosystem for its partnership with Ripple, concerning cross-border payments.
On October 6, the company announced a new partnership with the Stellar Development Foundation, the nonprofit organization behind the eponymous network, as well as Circle, the company behind the USDC stablecoin. Through this new partnership, MoneyGram customers will have the ability to convert their USDC to cash, or vice versa.
“As cryptocurrencies and digital currencies grow in importance, we are particularly optimistic about the potential of stablecoins as a method of cross-border payments. Given our expertise in global payments, blockchain and compliance, we are extremely well positioned to continue to be the leader in building bridges to connect digital currencies to local fiat currencies.”Alex Holmes, CEO of MoneyGram
In practice, the partnership is expected to launch in late 2021 in select U.S. states, followed by an international launch in 2022.
Goal: convert cryptocurrency into cash
This partnership is perfectly in line with MoneyGram’s development strategy. Indeed, last May, the company had announced a partnership with Bitcoin exchange platform and ATM operator, Coinme. This partnership made it possible to introduce the possibility of exchanging cryptocurrencies for cash, both at the ATMs deployed by Coinme and at MoneyGram’s partner outlets.
So many partnerships that should help improve access to cryptocurrencies, which until now has been mostly restricted to online platforms. This extremely interesting feature could allow MoneyGram to stand out from its competitors, such as PayPal. As a reminder, PayPal has launched a service for buying and selling crypto-currencies in the United States and recently in England.
Despite the promises made by stablecoin issuers about their usefulness on cross-border payments, the US SEC continues to have dollar-based stablecoins in its sights.
In this regard, Circle received a subpoena last July from the SEC after the launch of its Circle Yield product. Coinbase, which is also a member of the Centre Consortium, also had to face the SEC.