Ripple says MoneyGram to test its digital coin for payments
Ripple, the startup looking to help the financial industry speed up payments with blockchain technology, said MoneyGram International Inc. is testing the use of its XRP digital currency to move funds.
Companies such as MoneyGram, the world’s second-largest money-transfer business, typically use pre-funded accounts to fulfill customers’ transfers, which can tie up capital. Ripple’s blockchain technology and digital currency XRP could move money far faster, the companies said in a statement Thursday. MoneyGram scrapped a deal to sell itself to Chinese financial services giant Ant Financial earlier this month after failing to win regulatory approval.
“Ripple is at the forefront of blockchain technology,” Alex Holmes, chief executive officer of MoneyGram, said in the statement. “We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
Shares of Dallas-based MoneyGram jumped 8.3 percent to $13.89 at 9:09 a.m. in early trading in New York.
The pilot project may not lead to MoneyGram adopting XRP, according to the statement. The companies also will evaluate whether MoneyGram will become one of Ripple’s payment partners.
Ripple created XRP, a virtual currency used on its network, to allow banks to send client money from Paris to Tokyo, for example, in a matter of minutes rather than days. The company says its transaction fees are much lower than those for traditional money transfer and competing crytpocurrencies like bitcoin. Ripple enables this by having a middleman convert euros to XRP in Paris and sending the XRP to Tokyo, where it is then converted to yen by another middleman.
XRP has been in free fall the past few days, losing about a third of its value since last Thursday. Still, it’s up more than 700 percent in the past month. Because it has 38.7 billion XRP in circulation, that gain has made it the third most-valuable digital asset, according to CoinMarketCap.com.