MoneyGram International Inc., one of the largest money transfer services in the United States, is about to launch a service in collaboration with the Stellar blockchain that will allow its users to send stablecoins and convert them easily in fiat currency using the MoneyGram network.
Alex Holmes, CEO of MoneyGram, believes that the cryptocurrency industry is here to stay and grow despite the recent crisis and volatility. He said, “The crypto world and the fiat world are not really compatible today. We try to be a bridge between the crypto world and the fiat world.
When the service is fully operational, users with Stellar blockchain digital wallets will be able to convert their holdings to USDC stablecoin from Circle Internet Financial. While the company already provides Bitcoin services to its customers, it is now looking to expand its services to stablecoins.
The collaboration will allow users to send USDC remittances. The move comes as crypto remittances become more popular in emerging markets and, conversely, stablecoins (digital assets designed to maintain a one-to-one relationship with fiat currency such as the US dollar) come under scrutiny. heightened surveillance after Terra-UST debacle.
The crash of Terra’s algorithmic stablecoin TerraUSD and its sister token LUNA earlier in May triggered a larger crash in the cryptocurrency market. The loss of USDT’s peg to the dollar and the ensuing death spiral (it dropped from 97% to near zero) eroded confidence in stablecoins in general. Despite recent “selling and volatility,” the MoneyGram CEO is optimistic about the company’s future. He predicted that it would remain a key part of the financial network for a long time.
MoneyGram’s new Stellar service could also help spread cryptocurrency adoption in emerging markets. Remittances to low- and middle-income countries increased to $589 billion last year and are expected to increase further this year. Remittances represent a significant percentage of a country’s GDP. For example, remittances make up more than 20% of gross domestic product in countries like El Salvador, which made bitcoin legal tender last year. If remittances are returned via cryptos, this will surely help spread their adoption.
According to Holmes, “If a country like El Salvador is going to make Bitcoin transparent with US dollars in the country, I think consumers, through MoneyGram, should be able to transfer Bitcoin to El Salvador or transfer dollars and convert them to Bitcoin. If this is where the world is going, let’s participate in this world and see how we can help seize this opportunity.”
MoneyGram was courted by private equity firm Advent International and the Stellar Development Foundation in July. It is a non-profit organization that manages the Stellar blockchain. In October, the company collaborated with Stellar to create a cryptocurrency funds transfer service.
The writer is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash