Former Ripple customer MoneyGram announced a partnership with Coinme Inc., the largest licensed cryptocurrency cash exchange in the U.S. The partnership, which utilizes MoneyGram’s modern, mobile and API-driven payments platform and Coinme’s proprietary cryptocurrency exchange and custody technology, will bring bitcoin to thousands of new point-of-sale locations in the U.S., with plans to expand to select international markets in the second half of 2021.
MoneyGram and Ripple
Moneygram, one of the world’s largest money transfer companies in the World, first partnered with Ripple in January 2018, piloting ODL (xRapid at the time). 18 months later, in June 2019, the companies announced a strategic partnership, which would have an initial term of two years. Ripple became MoneyGram’s key partner for cross-border settlement using digital assets. As part of this partnership, Ripple made an investment in MoneyGram equity, made up of common stock and a warrant to purchase common stock.
MoneyGram started using Ripple’s ODL (On-Demand Liquidity), the product utilizing the digital asset XRP, for cross-border transactions. By August, MoneyGram was “settling currencies in seconds” with XRP. This partnership continued to move forward for 18 months. Even in December 2020, a week prior to the SEC lawsuit, in an interview on CNN MoneyGram CEO Alex Holmes stated: “We’ve been partnering with Ripple now for about 18 months and the idea behind that was for us to really push innovation and see how we can help in a pioneering of the expansion of global utilization of blockchain”. He then continued to say that “Ripple is doing a lot of unique things with blockchain, with crypto to help drive that. And that has been a really nice partnership, and we also learned a lot together and continue to push the boundary of what can be, and it has been a lot of fun for sure”.
A few months after the SEC lawsuit was announced, in March 2021, Ripple and MoneyGram ended their partnership.
MoneyGram and Coinme
The partnership between the two companies opened MoneyGram’s business to an entirely new customer segment by building a bridge with Coinme to connect bitcoin to local fiat currency. In a CoinDesk interview, Alex Holmes spoke about the new partnership but was also asked about Ripple and ODL.
Ripple was a great pilot for us, Really moved us forward with Blockchain and Crypto pic.twitter.com/nJ2KD6C2wc
— 𝗕𝗮𝗻𝗸XRP (@BankXRP) May 12, 2021
When asked if this partnership was a replacement of the deal with Ripple he replied that MoneyGram’s work with Ripple was very different. MoneyGram was utilizing Ripple’s RippleNet and ODL products to think about the actual flow of the funds while with Coinme MoneyGram is moving fiat into the Coinme wallet and then allowing customers to buy Bitcoin. About the SEC lawsuit, Mr. Holmes stated that:
“It’s unfortunate what happend with Ripple, it was a great pilot for us, it really moved us progressively forward in blockchain and what was happening in the crypto world. Obviously with the challenges that they are facing today, with the SEC and government regulation, which continues to be a big topic in the crypto space, it made it very difficult to continue to operate, particularly in the United States. We will see where that goes down the road and I do think that there is a continued future and an opportunity in blockchain and perhaps in crypto as well in terms of ledgers and movements and settlement flow of funds”.
Beyond the unexpected use of the term “pilot” in describing Ripple’s strategic partnership with MoneyGram, Mr. Holmes made it abundantly clear that the reason behind the abrupt termination of the partnership was the lawsuit filed by the SEC.
During the same interview, Coinme CEO Neil Bergquist stated that the company will be adding support for other cryptocurrencies. In September 2019, Xpring, Ripple’s investment arm, invested in Coinme.