- Money transfer giant MoneyGram International announced on January 12, 2018 that it would begin testing the cryptocurrency XRP – managed by the fintech firm Ripple – to make transfers faster and more efficient.
- Ripple’s XRP improved 4% to $2.06 on the news. The bank transfer specialist’s token has risen from below $1.00 in early December as high as about $3.00. XRP is now the second-largest cryptocurrency in terms of market capitalisation in the world.
MoneyGram has typically made transfers with funds on site, that is, funds are held on all sites to pay transfers. But now the company is trying to use the Ripple funds transfer network to actually move funds from one place to another. Ripple makes international transfers and exchanges currencies by first converting all funds into XRP and then finding the cheapest route for the transfer to reach its destination.
Ripple has had vast success with this technique, moving funds from one bank to another far faster and more economically than other could.
“Ripple is at the forefront of blockchain technology,” Alex Holmes, chief executive officer of MoneyGram, said in a statement. “We’re hopeful it will increase efficiency and improve services to MoneyGram.”
In a January 10 interview, Ripple CEO Brad Garlinghouse said the new cryptocurrency is focused on working with banks and other institutions to “dramatically improve” the way money moves globally. Garlinghouse added that Ripple is now working with three of the largest financial institutions in the world to change the way money is transferred.
“Ripple has really been very proactive in working with financial institutions, working with the banks, with the payment providers,” Garlinghouse continues. “We are even working with the Bank of England to review regulations regarding cryptocurrency and money transfers.”
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