XRP, the native token of Ripple, jumped by c. 7% on the news that Ripple strengthens its partnership with major money transfer company MoneyGram.
However, later, the price corrected lower and is now up by almost 4% in the past 24 hours (04:27 UTC).
XRP price chart:
The California-based blockchain startup focusing on the banking sector has already made USD 30 million initial investment in MoneyGram equity and has a right to invest another USD 20 million over two years, MoneyGram said. Ripple acquired the newly issued shares at more than 180% premium. Before of the announcement, market capitalization of MoneyGram stood at around USD 82 million and more than doubled after the partnership was confirmed.
The partnership will focus on the Ripple’s xRapid product, a solution for on-demand liquidity, which leverages XRP.
“Through our partnership with Ripple, we will also have the opportunity to further enhance our operations and streamline our global liquidity management,” Alex Holmes, MoneyGram Chairman and CEO, was quoted as saying in the announcement.
“This is a huge milestone in helping to transform cross-border payments. MoneyGram is one of the largest money transfer companies in the world and the partnership will continue to further the reach of Ripple’s network,” Brad Garlinghouse, CEO of Ripple, added.
Rumors that Ripple acquired MoneyGram appeared earlier in June and both companies declined to comment back then.
Also, both companies have been collaborating since January 2018, when Ripple announced that it partnered with MoneyGram to pilot XRP.
Meanwhile, Youri Bebic, Global Head of Product and Innovation at MoneyGram, said recently that the company is “ripe” for blockchain-based solutions and was already running “some pilot and trial” this spring.
MoneyGram, which was founded in 1940, was on sale recently as it’s trying to deal with falling revenues and restructure its debt pile, which reportedly totaled USD 902.8 million as of the end of September 2018 and comes due next year.
According to their website, MoneyGram operates in more than 200 countries and territories around the world, whether online, with services available through a mobile device, at a kiosk, or in local shops.
However, just last month, Ripple partnered with MoneyGram’s competitor, money transfer company Ria Money Transfer, a subsidiary of payment service provider Euronet Worldwide, in order to help Ria “settle transactions with increased speed, transparency and efficiency and deliver a better experience to their customers.”
Watch Brad Garlinghouse commenting on the MoneyGram investment news:
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