Ripple, the startup behind the XRP cryptocurrency, has agreed to invest up to $50m in MoneyGram, the giant money-transfer service.
Ripple agreed to buy $30 million worth of shares and warrants to buy stock at $4.10 a share (for a 10% stake in the company), and additional warrants for up to $20 million worth of newly issued stock, also at $4.10 a share, over the next two years at MoneyGram’s discretion. MoneyGram already services 200 countries and territories, with roughly $600 billion processed in the global remittance market. Currently, the company uses traditional foreign exchange markets, which requires pre-funding accounts. In a statement, MoneyGram CEO Alex Holmes said “it’s imperative that we continue to improve our platform and provide the most effective solution to get funds from point A to point B. Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.”