MoneyGram CEO Alex Holmes has recently discussed the usage of Ripple and its corresponding cryptocurrency, XRP, in cross-border payments.
In an interview with Fortune magazine, Holmes discussed the obstacles and potential that these technologies provide in the remittance market.
Read Also: Ripple CEO Brad Garlinghouse Officially Releases Video On Hinman Docs, Appreciates XRP Community
MoneyGram CEO admitted that the existing banking system, which was created largely for domestic payments and business transfers, is a major impediment for remittance companies. As a result, MoneyGram investigated several alternatives to reduce remittance expenses and identified cryptocurrency as a potential answer. Last year, the company added a buy-and-sell feature to its smartphone app.
However, Holmes emphasized that user demand for fiat remains strong, and the majority of people choose not to own cryptocurrencies. He explained that when they get a crypto payment, people look for a straightforward route into traditional currencies.
MoneyGram’s XRP Experience
MoneyGram initially explored Ripple’s solution but experienced difficulties with translating XRP into local currencies. Partnerships with exchanges and market makers were required, which ultimately increased the costs of international remittances.
This stumbling block shows the challenges of converting cryptocurrency to fiat currencies in cross-border transfers. MoneyGram severed its collaboration with Ripple not long after the US Securities and Exchange Commission (SEC) filed lawsuit against Ripple.
Read Also: SBI CEO States what Impact Victory Against SEC Could Have On XRP Price and Ripple IPO
MoneyGram and XRP’s Stern Rival
Despite these challenges, MoneyGram has continued to seek novel solutions. The company is currently collaborating with Stellar blockchain (XLM) to make the stablecoin USDC purchase, storage, and withdrawal easier. This collaboration strives to meet the requirements of persons in inflation-affected countries.
Users in these regions can convert USDC to their native currency by storing it in digital wallets enabled by the Stellar ecosystem. However, the benefits of keeping USDC over standard US dollars are still being investigated, with possible fee reductions being a major factor.
Finally, Holmes’ interview highlights the continued efforts of remittance providers like MoneyGram to negotiate the crypto ecosystem. It also keeps looking for methods to increase cross-border payment efficiency.
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