MoneyGram share price rises after Ripple (XRP) pilot announced

Ripple, a blockchain-focused startup based in San Francisco, announced a new partnership with money transfer giant MoneyGram International MGI on Thursday.

In a statement, Ripple CEO Brad Garlinghouse described the MoneyGram tie-up as a strategic one, and said it would demonstrate XRP's ability to lower costs for money transfers between friends and families.

XRP allows banks and payment companies to send money quickly, no matter the location.

The move is significant because the arrangement involves the use of XRP, Ripple's digital currency, which has recently soared in value but also faced questions about its practical uses.

Skeptics have suggested XRP is unnecessary to carry out transactions but according to MIT Technology Review, "Ripple's big bet is that XRP will become a "bridge currency" that many financial institutions use to settle cross-border payments faster and more cheaply than they do now using global payment networks, which can be slow and involve multiple middlemen". The money transfer company will access and use the token through xRapid, Ripple's on-demand liquidity product.

This shows that Ripple is emerging as a key supplier of technology support for money transfers not only to banks but also to other institutions having their own payments wallet. The move helped Ripple's popular bitcoin alternative, XRP, move higher on the day-defying a nearly-universal cryptocurrency selloff.

If the test is successful, MoneyGram could make Ripple its go-to transfer method, moving the virtual currency one step closer towards mainstream acceptance - and making it an even greater long-term threat to pre-eminent cryptocurrency Bitcoin. "We're hopeful it will increase efficiency and improve services to MoneyGram's customers", Holmes added.

Ripple is up 10% today as of 10:45am ET, trading at $2.16 according to data from CoinMarketCap. Ripple most recently announced it would be teaming up with Amex and Santander for a blockchain pilot to speed up payments between the USA and the United Kingdom.

  • Eleanor Harrison