Ripple now has a strong competitor. Stellar has just acquired a stake in the international payments giant, MoneyGram, becoming a full-fledged player in the payments sector, alongside fintech Ripple. This announcement comes a few days after Ripple joined MasterCard and Swift in the Bank for International Settlements working group on cross-border payments. Can we now say MoneyGram will serve as a springboard for Stellar in its competitive fight against Ripple?
Stellar now has a seat on the board of MoneyGram
Just over a year ago, in June 2022, MoneyGram launched a crypto-to-fiat gateway in partnership with the Stellar Development Foundation. Born out of an ambition to create fluidity between cryptocurrency and fiat currency and to foster financial inclusion, the partnership has enabled MoneyGram to offer fast and secure cryptocurrency money transfer services.
This collaboration, which originated in 2021, resulted in the development of a crypto product called “MoneyGram Access”. It was designed to give MoneyGram users access to the crypto economy. Dixon also clarified that the partnership signed between the SDF and MoneyGram has allowed Stellar’s ecosystem to grow, making the network “the leader in cash-to-crypto inflows and outflows”.
Clearly, we must therefore believe that the relationship between the two institutions has really matured. A little over a year after signing this partnership, Stellar is moving up a gear. More than just a partnership, the Stellar Development Foundation now owns an equity stake in MoneyGram and obtains a seat on its board of directors. On his official X account, the CEO of Stellar expresses his satisfaction:
“The decision to invest in MoneyGram was easy. After years of getting to know the company and the teams, we are excited to be part of the next chapter of MGI. These last years spent working together have been great and we are delighted with the continuation! “.
Now represented by its CEO on MoneyGram’s board of directors, the SDF will “strengthen and guide” MoneyGram in the world of the digital economy. It will support him in exploiting the potential of blockchain technology and that of cryptocurrencies.
Could MoneyGram give Stellar the edge in the cross-border payments market?
The SDF’s acquisition of a stake in MoneyGram is not necessarily good news for Brad Garlinghouse’s Ripple company.
Indeed, the company Ripple had already, for several years, acquired the reputation of a leader in the sector of cross-border payments thanks to its blockchain network RippleNet. It spans over 55 countries and supports over 120 fiat currencies through its native cryptocurrency, XRP.
It is also on the strength of this accumulated experience in the payments sector that the Bank for International Settlements (BIS) has selected the fintech company as one of the members of its working group on cross-border payments.
The aim of the working group is to study the possibilities and methods of improving interoperability and the extension of cross-border payments. However, despite Ripple’s reputation on the issue of cross-border payments, the XRP ecosystem must now settle a more serious issue: the Stellar cryptocurrency.
Indeed, by buying stakes in MoneyGram, the company clearly intends to disrupt the existing order in the international payments industry. Stellar could prove to be a real barrier to the expansion of the XRP ecosystem.
Incidentally, in celebration of the new stride being made by the Stellar Development Foundation in the payments space, the company’s CEO, Denelle, Dixon affirmed that “Opportunities won’t stop growing” and that the “XLM will soon be able to benefit from various innovations from MoneyGram and its partners”.
Beyond this news, it should be remembered that last January, Tascombank, one of the oldest banks in Ukraine, recognized the potential of the Stellar blockchain. She confirmed, after studies, that the Stellar blockchain is beneficial for the financial system of Ukraine. Ukraine has thus started collaborating with Stellar since 2021. We are waiting to see what will come of it.
Will Stellar steal the limelight from Ripple in the long run?
In the field of cross-border transactions, Ripple certainly has a richer experience than that of Stellar. In addition, it is noted that Ripple’s crypto products are more designed for large companies and financial institutions while to date, Stellar’s offer is more aimed at individuals and small organizations.
As a reminder, originally, it was with Ripple that MoneyGram was to forge this partnership that it forged with Stellar to put blockchain technology at the service of money transfers. The collaboration had already started before being suspended later, no doubt due to the twists and turns of the SEC lawsuit against the company.
Stellar’s initiatives seem to indicate that the network is determined to steal the limelight from Ripple. However, in the long term, the expectation is that the two companies will do more in these two parts of the same market, even if the speed of technological innovation and partnerships can be a game-changer.
For now, we are waiting to see the various innovations that MoneyGram will bring to the ecosystem of Stellar Lumens. This is what will determine whether the balance will lean more towards XLM in its battle against XRP.
While it is true that so far the announcement of SDF’s acquisition of a stake in MoneyGram has not seemed to cause fluctuations in the price of XLM, it can be said with certainty that this initiative will produce important benefits for the Stellar ecosystem in the long term.
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