- Ripple’s XRP returns to Coinbase, fueling speculation about a potential rekindled partnership with MoneyGram.
- Past collaboration between Ripple and MoneyGram bore significant financial fruit; is a reunion on the horizon?
History Revisited: Ripple & MoneyGram
The recent reinstatement of Ripple’s XRP on Coinbase, subsequent to its legal win over the Securities and Exchanges Commission (SEC), has cast a spotlight on the previous association between global remittance leader MoneyGram and Ripple. Given the court’s assertion that XRP is not an illicit security, the question looming large is whether the two behemoths will reunite.
The Rise, Fall, and Potential Resurgence
MoneyGram, in its pursuit for cutting-edge remittance solutions, integrated Ripple’s cross-border technology in 2018. Capitalizing on this synergy, Ripple pumped in $50 million in 2019, resulting in MoneyGram accruing $11.3 million in the same year. This financial windfall was split into two tranches: $2.4 million in Q3 and a substantial $8.9 million in Q4.
However, the harmonious collaboration hit rocky shores in March 2021. Regulatory ambiguities surrounding XRP’s status, stemming from SEC’s allegations, culminated in a contract termination. But with the recent vindication of XRP, stakeholders like MoneyGram find themselves at a crossroads of potential reengagement.
A Twitter exposition by John Deaton, an authority on crypto regulations, unearthed the nuanced relationship shared by MoneyGram, XRP, and the SEC. Of interest is the surprising about-face by former SEC Chairman Jay Clayton. On the eve of his resignation, Clayton opted to drop charges against XRP, an unexpected decision given his prior stance and consultations with successor, Gary Gensler.
After Coinbase listed #XRP in late February 2019, @MoneyGram filed a notice with the SEC and read what it said:
“This agreement will enable MoneyGram to utilize Ripple’s xRapid product (XRP) in foreign exchange settlement as part of the MoneyGram’s cross-border payment process.” pic.twitter.com/gpXcx9YQuw
— John E Deaton (@JohnEDeaton1) April 14, 2023
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Deaton’s arguments are fortified by the history. In 2019, MoneyGram candidly consulted the SEC about its dealings with XRP. Bafflingly, the SEC guided MoneyGram on classifying XRP transactions as a contra expense, a descriptor never linked with securities in the annals of the Howey Test.
The Financial Stability Oversight Council (FSOC) report of 2019, endorsed by Clayton, spotlighted XRP alongside crypto titans like BTC and ETH. Yet, it refrained from designating XRP as a security, acknowledging its burgeoning market presence instead.
Adding to the regulatory quagmire is the SEC’s fluctuating stance on XRP. Before initiating litigation against Ripple, the SEC had explicitly clarified that XRP wasn’t a security, casting doubts on its regulatory consistency.
As Ripple celebrates its recent legal triumph and XRP’s relisting, the industry’s gaze is transfixed on MoneyGram. With the regulatory mist lifting, there’s palpable anticipation surrounding MoneyGram’s potential move. Will they once again harness XRP’s prowess to amplify their remittance technology?
Amidst these unfolding narratives, Stellar (XLM), an XRP competitor, has made strategic advances. The Stellar Development Foundation’s recent acquisition stake in MoneyGram International’s parent entity, Madison Dearborn Partners, hints at a captivating competitive backdrop.
All eyes are now on MoneyGram and Ripple’s potential next steps in this enthralling crypto dance.
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