Partnerships and deals are being done left and right in the last few months. Many companies are now working on project with crypto exchanges and/or cryptocurrencies for the next few years. The trend seems to be increasing as a new Ripple MoneyGram partnership was announced yesterday.
The so-called strategic partnership will be centered around Ripple’s xRapid. xRapid is a liquidity product, which allows funds to be send in one currency and instantly settled in the local currency at its destination.
The Ripple MoneyGram partnership will allow MoneyGram to draw up to $50 million from Ripple in exchange for equity. This agreement will last for 2 years, but changes regarding the extension of the partnership can occur at all times.
The implications of the Ripple MoneyGram partnership
The Ripple MoneyGram partnership shows incredible potential. MoneyGram is one of the biggest players in the global remittance market which is worth $600 billion. Additionally, the major money transmission network has customers in over 200 countries worldwide.
With the use of xRapid, MoneyGram will have the ability to instantly settle USD to local destination currencies 24/7. This will potentially revolutionize the entire sphere of cross-border money transfers.
MoneyGram is currently relying on foreign exchange markets in order to meet its settlement obligations. These obligations require an advanced purchase of most currencies. The new partnership will allow the money transmission network to instantly settle important currencies complete all the obligation requirements in a timely manner.
Additionally, the costs and risks will be minimized and the balance sheet efficiency will be greatly improved.
This is not Ripple MoneyGram partnership comes after Ripple partnered up with India’s Federal Bank (IFB) earlier this year. The partnership was an initiative to improve IFB’s remittance network. Ripple’s network was used entirely for cross border remittances.
Thanks to cryptocurrencies, in the next 10 to 20 years, cross-border payment headaches will probably be a thing of the past.
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Tags:cross-border payment improvementsIFB RippleRipple MoneyGramxRapid game changerxRapid MoneyGram