U.S. money transfer company MoneyGram International Inc. (MGI) has announced a new pilot program in which it will test payments on its global network xRapid using XRP, a digital currency created by San Francisco startup Ripple. As Ripple claims to have the fastest and most scalable digital asset, MoneyGram indicates than an alliance should reduce money-transfer costs and settlement times.
Shares of MoneyGram have jumped about 2% as of Wednesday afternoon at $12.36. The value of XRP is also recovering after a major slump in the new year caused in part by reports that South Korea is preparing a bill to ban cryptocurrency trading. (See also: If You Invested $100 in Ripple in January 2017, What Would You Have Now?)
Ripple's Big Year
Ripple, which develops blockchain-powered software for banks and financial institutions, lists customers such as UBS Group AG, Banco Santander S.A. and Banco Bilbao Vizcaya Argentaria S.A. Its recent partnership is part of the Silicon Valley startup's larger initiative to sign on remittance companies. Earlier this month, Ripple CEO Brad Garlinghouse took to his Twitter account to write that three of the world's five largest money-transfer companies would begin using XRP in 2018.
According to Ripple, an average transaction on its network takes two to three seconds to process, compared to bitcoin transactions, pegged by Blockchain.info at an average of 51 minutes. In November, the firm partnered with American Express and Santander on a blockchain pilot intended to the cut time for cross-border payments between the U.K and the U.S.
XRP, like its peer digital currencies, has been on a volatile run. Since early December, XRP grew from just about $0.25 to as high as $3.81 last week and down to $2.02 at current levels, according to coinmarketcap.com. It briefly surpassed ethereum to become the second-largest cryptocurrency by market capitalization last month, falling back to its position at fourth.
Ripple has sold 38 billion XRP on the secondary market and maintains 61 billion as an asset on its balance sheet, according to The Wall Street Journal. (See also: Is The Rise in Ripple's Price a Bubble?)
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