Through a statement on its twitter account, MoneyGram announced that it will be integrated into the blockchain network of Stellar Development Foundation and the fintech firm Circle to accelerate money transfers and payment settlement.
According to the announcement: “The MoneyGram network, integrated with the Stellar blockchain and supported by Circle’s USDC, will provide cash funds and local currency payments for USDC consumers. As well as an almost instantaneous internal liquidation ».
According to the shared statement. United Texas Bank will act as the clearing bank between Circle and MoneyGram. The joint solution is expected to be launched in selected markets starting in 2021. The international launch is planned for 2022.
MoneyGram will unite cryptocurrencies and fiat
Stellar Development Foundation, a non-profit organization that supports the development of the Stellar blockchain, will help integrate its network into MoneyGram to enable cash financing and cryptocurrency payments in local currencies for customers.
MoneyGram will use Circle’s USDC to settle payments and convert payments to the customer’s local currency. According to the chief executive of the payments company, Alex Holmes, the settlement process could be carried out in near real time using the stable currency pegged to the US dollar.
The cross-border payment company has one of the largest money transfer service providers. Allowing clients to transfer funds in more than 200 countries.
Notably, MoneyGram has been processing cross-border payments through the On-Demand Liquidity (ODL) system using the XRP token since 2019.
It has been known that cross-border payments have always had problems in traditional banking. Not everyone in the world has access to banking services. Furthermore, limitations and sanctions hurt many people in developing countries. Cryptocurrencies, especially stablecoins, can solve many of these problems. But they still need a partnership with traditional financial services to offer comprehensive solutions.
USDC and the Stellar blockchain are very active in addressing these issues and partnering with banks. The latest partnership with MoneyGram International can be a strategic step on this path.
Furthermore, with the news that MoneyGram International will allow USDC remittances on the Stellar blockchain, it is expected that this digital currency can be used more freely and easily in cross-border payments.
Holmes also added that MoneyGram is enabling consumers to “bridge cryptocurrencies and fiat currency.” And that the company “can be a pioneer and leader in that opportunity.”
Stellar wallet holders could access physical locations to convert USDC to cash, bringing the network to the physical world.
Recall that USDC is one of the most successful stablecoins on the market. It is not limited to blockchains and is considered an open protocol stablecoin. Stellar and many other blockchains support it. It means that implementing and using stablecoin has the lowest barrier among stablecoins. With this new association, it is expected that the issue of remittances will make it easier and more accessible to users around the world. Especially for all those who are dependent on a family member or friend abroad.