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Cross-border payments giant MoneyGram is now working with the Stellar network for instant money transfers using the USDC stablecoin.
The companies announced on Monday that they would start the pilot in the fourth quarter of this year, and a gradual rollout of enabling USDC fiat on and off-ramp across MoneyGram’s retail platform will happen early next year.
This ledger-based stablecoin bridge between crypto and local currencies aims to connect MoneyGram’s over 150 million global customers.
“Working with MoneyGram allows end consumers to have on- and off-ramps everywhere that MoneyGram’s vast agent network supports this. So this is just transformational in terms of being able to exchange crypto for fiat and fiat for crypto,” said Denelle Dixon, CEO and executive director of the Stellar Development Foundation.
“We’re trying to go as big as we can.”
United Texas Bank will be serving as a settlement bank between MoneyGram and Circle.
According to Circle, this “marks a breakthrough moment for the use of digital currencies in cross-border payments.” Peer-to-peer remittances cumulatively amounted to more than $700 billion a year in pre-pandemic times.
MoneyGram is not new to crypto as previously it partnered with Ripple to leverage the company’s on-demand liquidity (ODL) to facilitate FX trading. But the partnership came to an end after the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its top two executives in December last year for conducting an unregistered security offering.
According to Alex Holmes, MoneyGram’s chairman and CEO, their partnership with Stellar is different from their relationship with Ripple and also larger in scope because it directly touches on consumer payments.
This week also came the report that Circle has received an investigative subpoena from the SEC, but MoneyGram CEO isn’t concerned as he said in an interview, “I’m quite used to regulation.”
“Unfortunately, a lot of regulation ends up being a look back. I think the blockchain world and digital asset world [have] really accelerated and now I see a lot of regulators looking to catch up.”
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