- MoneyGram CEO, Alex Holmes, discusses the challenges and opportunities of using Ripple and XRP in cross-border payments.
- MoneyGram initially faced obstacles when converting XRP into local currencies, leading to a transition to collaborating with Stellar blockchain (XLM) and utilizing the stablecoin USDC.
In a recent interview with Fortune magazine, MoneyGram CEO Alex Holmes delved into the discussions surrounding Ripple and XRP in the context of cross-border payments, shedding light on the challenges and opportunities presented by these technologies. Holmes acknowledged that the traditional banking system, primarily designed for domestic payments and corporate transfers, poses a significant obstacle for remittance companies like MoneyGram.
While exploring various avenues to decrease remittance costs, MoneyGram recognized the potential of cryptocurrencies as a solution and integrated a buy-and-sell feature into its mobile app last year. However, Holmes explained that the demand for fiat currency remains dominant among users, as most individuals prefer not to hold cryptocurrencies. The CEO noted that users seek a direct route into traditional currencies once they receive crypto payments.
MoneyGram initially ventured into Ripple’s solution with the use of XRP but encountered obstacles when converting XRP into local currencies. This process required partnerships with exchanges and market makers, ultimately increasing the costs of international remittances, which the firm sought to reduce. This challenge highlights the complexities involved in transitioning from cryptocurrencies to fiat currencies in cross-border payments.
Notably, the partnership between Ripple and MoneyGram ended after the U.S. SEC filed a lawsuit against Ripple in 2021.
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Despite these hurdles, MoneyGram has continued its pursuit of innovative solutions. The company is now collaborating with Stellar blockchain (XLM) to facilitate the purchase, storage, and withdrawal of the stablecoin USDC. This collaboration aims to address the needs of individuals in countries plagued by inflation. By holding USDC in digital wallets backed by Stellar, people in such regions can easily transfer it to their local currency when needed.
However, the advantages of holding USDC over traditional U.S. dollars are still under active exploration, with potential fee reductions being a significant consideration. Holmes’ interview emphasizes the ongoing efforts of remittance companies like MoneyGram to navigate the crypto landscape. Despite the challenges encountered when adopting digital assets like XRP, the company actively seeks ways to leverage other cryptocurrencies, such as USDC on the Stellar blockchain, to enhance cross-border payment efficiency.
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