On June 17, Ripple, a distributed ledger technology company, announced that it had entered into a strategic partnership with international remittance giant MoneyGram. In this cooperation, Ruibo will become a global partner of MoneyGram to use Ripple (XRP) for cross-border payment and foreign exchange settlement business.
According to the announcement, Ripple has agreed to establish a strategic partnership with Speed Money, one of the world's largest transfer companies. Through this two-year partnership, Ripple will be the primary partner for MoneyGram to use digital assets for cross-border payments and foreign exchange settlement. In this partnership, Ripple has agreed to provide a capital commitment to MoneyGram to enable Ripple to contribute up to $50 million in two years to exchange funds in MoneyGram.
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The relationship between MoneyGram and Ripple will focus on the xRapid product, an on-demand liquidity solution that reduces the reliance on pre-financing by allowing funds to be sent from one currency and immediately settled in the target currency. It uses XRP as a real-time bridge between sending and receiving currencies. Ripple believes that XRP is still the most effective way to settle digital assets, with transaction costs being only a fraction of a cent, while other digital assets are trading at about $30 each. Similarly, XRP has an average trading time of 2 to 3 seconds, and other top digital assets have an average trading time of 15 minutes to 1 hour.
Alex Holmes, Chairman and CEO of MoneyGram, said:
“As the payment industry grows and matures, we must continue to improve our platform and provide the most effective solution to move funds from point A to point B. With Ripple's xRapid products, we will be able to continue 24 hours a day. The settlement of funds from the US dollar to the target currency has the potential to revolutionize our business and significantly simplify our global liquidity management."
MoneyGram operates in the global $600 billion remittance market, serving millions of customers in more than 200 countries and regions, supporting multiple currencies. Today, MoneyGram relies on the traditional foreign exchange market to fulfill its settlement obligations, which requires the purchase of legal currency in most countries in advance. Through this strategic partnership, MoneyGram will be able to settle some of the world's major currencies and match financing time with its settlement requirements, reducing costs, improving balance sheet efficiency and reducing risk.
Ripple CEO Brad Garlinghouse said:
“This strategic partnership will enable MoneyGram to significantly improve its business and benefit millions of people around the world from its increased efficiency. This is a huge milestone in helping to transform cross-border payments, I look forward to A long-term, very strategic partnership between our two companies."
Ripple has been devastated by Facebook?
According to previous reports, Facebook will release its test network for the cryptocurrency Libra project on June 18. Facebook has recruited dozens of giant companies including Visa, MasterCard, Uber, and PayPal to participate in its global cryptocurrency program, forming a large cryptocurrency economic network covering 2.7 billion people worldwide. Facebook wants to solve a bank's failure point and build a fast, easy-to-use, low-cost cross-border payment system that is generally accepted by regulators. However, the target of Facebook cryptocurrency seems to be the bank, and there is no banking institution involved in the list of previously reported Facebook cryptocurrency partners. The analysis believes that Facebook's cryptocurrency will impact those cryptocurrencies that are developing in the direction of cross-border remittances, the first of which is Ripple. Some even think that Facebook's entry means that Ripple's life expectancy has entered a countdown.
Ripple Chief Technology Officer David Schwartz countered and said:
I like the idea that there is no evidence to show any understanding of XRP. This is just bitcoin's minimalist thinking that only bitcoin and others are considered.
In fact, unlike Facebook, Ripple is much better for banking institutions. Ripple is not meant to replace banks, but to provide solutions for banks. According to Ripple's official website, the number of banking financial institutions currently using the Ruibo solution has exceeded 50.
In addition, Visa recently announced its global blockchain remittance solution B2B Connect. Visa is also considered an important competitor to Ripple. It is speculated that Ripple is being attacked on all sides and is in a difficult situation. However, Ripple today announced a strategic partnership with MoneyGram before Facebook released Libra, which seems to have a counterattack on Facebook.
With Facebook's cryptocurrency Libra coming to the surface, whether Ripple will usher in a strong competitor and the impact, we will do more analysis in subsequent reports.