MoneyGram trials Ripple's XRP digital currency
11 January 2018 | 9518 views | 0
Shares in MoneyGram gained on Thursday on news that the old-school money transfer player has teamed up with Ripple to pilot the blockchain startup's XRP digital currency in its payments flows.
The trial will see MoneyGram use XRP in payment flows through Ripple's payment network xRapid in an effort to speed up and cut the cost of transferring money.
Ripple claims that XRP is the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to Bitcoin fees of about $30 per transaction. The firm also boasts average transaction times for XRP of two to three seconds.
"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram. Money transfer companies are incredibly important because they help people get money to their friends and loved ones," says Brad Garlinghouse, CEO, Ripple.
News of the deal saw MoneyGram's share price rise as much as 10%, to $13.39 in morning trading, before settling down to $12.72 at pixel time. Western Union saw a similar boost earlier this week on rumours of a possible future business deal with Ripple
XRP also saw its price rise today by about four per cent to $2.08. The currency has a market capitalisation over $80 billion following a massive appreciation in price over the past year.
Much of the interest in the coin appears to be based on assumptions that XRP may ultimately come to function as a reserve currency for banks who use Ripple's technology to conduct real-time funds transfers.
Whether this will come to pass is debatable and was the subject of a heated Twitter spat between New York Times journalist Nathaniel Popper and Ripple chief Brad Garlinghouse.
This prompted a furious response from Garlinghouse, who claimed that Popper had been offered two interviews with banks that planned to use the currency: