Moneygram, a Dallas-based payments and money transfer company, has announced its partnership with the Stellar Development Foundation. This foundation is the development and growth arm of the Stellar blockchain. It will make full use of its capabilities to settle payments and facilitate remittances. To move funds more efficiently and effectively, the company will use the Stellar blockchain’s native USDC version.
Moneygram and Circle are not banks. United Texas Bank will act as a liaison between MoneyGram and Circle as a settlement bank.
Moneygram is now a convenient way for USD coin users to access fiat funds and vice versa. This adds value to the USDC ecosystem. Moneygram announced a partnership agreement with Ripple in December 2020. It was the first remittance company to incorporate blockchain. This partnership was disbanded in December 2020 when the SEC declared it would be pursuing legal action against the company.
It’s simpler, faster, and cheaper
Company will soon implement a new system that allows for fast settlements with low fees and almost instantaneous settlements. This is due to the Stellar blockchain. There will also be no implied volatility because of the use stablecoins. Alex Holmes, CEO at Moneygram, spoke out about the importance of these instruments:
We are particularly optimistic about stablecoins’ potential to streamline cross-border payment. As crypto and digital currencies gain in popularity, we believe that they will be able to do so.
Circle claims that this partnership can help lower the cost of remittances. This is one of UN’s Sustainable Development Goals. It aims to reduce remittance costs by 7% to 3% depending on the amount of funds sent. It will be interesting for cryptocurrencies to help with this goal in the short-term.