MoneyGram announced that the company has signed a partnership with Ripple. The announcement has since sent MoneyGram shares up 13 percent. MoneyGram is currently testing the company’s XRP cryptocurrency in an attempt to see if Ripple’s blockchain technology can speed up transfer times and lower costs. Ripple’s XRP has climbed as well, according to the Business Insider.
XRP skyrocketed 15 percent higher to $2.22 per coin at 9:55 a.m. EST. The XRP surge was considered a major recovery after South Korea announced the country’s plans to prepare a bill that will ban cryptocurrency trading.
MoneyGram is based in Dallas, Texas, and will use XRP cryptocurrency to speed up and reduce the cost of transferring. The U.S. money transfer giant has plans to transfer money through Ripple’s payment network called xRapid, according to CNBC.
According to Ripple, an average transaction on its network will only take between two and three seconds to process. On the other hand, Bitcoin transactions currently take around 51 minutes on average to process, according to data by Blockchain.
On Thursday, Brad Garlinghouse, the CEO of Ripple, said in a statement that banks are not the only businesses that are affected by ineffective global payments, but institutions such as MoneyGram are also dealing with the same issues.
“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.”
Ripple’s XRP has declined significantly; however, Ripple said that its price has not been reflected accurately. Ripple claimed that CoinMarketcap’s decision to remove Korean cryptocurrency exchanges from its platform has affected prices. The website removed Korean exchanges due to the “extreme divergence” in prices compared to the rest of the world.
Ripple’s CEO said that money transfer companies are very important because they help people get money to their friends and loved ones in a timely manner. Garlinghouse added that by using Ripple’s xRapid, MoneyGram will be able to transfer money “as quickly as information.”
Several international banks and financial institutions have backed Ripple. In November, Ripple teamed up with American Express and Santander on a pilot in an attempt to speed up payments across the border between the United States and the United Kingdom.
MoneyGram and Ripple’s coupling is also a pilot project and may not lead to MoneyGram’s full adoption of XRP. The two companies also will evaluate whether Ripple will become a payment partner to MoneyGram.
As of last Thursday, XRP has lost about a third of its total value. Nonetheless, XRP is up more than 700 percent since December of 2017. Just last year, XRP was just $0.006687 per coin, according to Tech Crunch. Currently, there are 38.7 billion XRP in circulation around the world. According to CoinMarketCap, XRP is currently the third most-valuable digital asset.
Alex Holmes is the executive officer of MoneyGram and said in a statement that Ripple is at the forefront of blockchain technology. Holmes said that his team is hopeful that Ripple’s XRP will increase efficiency and improve services to MoneyGram customers.