MoneyGram Jumps After Saying It'll Test Ripple's Digital CoinsBy and
MoneyGram to try XRP to see if it eases payments for customers
Ripple erases losses after announcing MoneyGram partnership
MoneyGram International Inc. climbed the most in 10 months after saying it was working with blockchain startup Ripple to test the use of its digital currency to move funds.
Shares of the money-transfer company jumped 10 percent to $13.39 at 9:37 a.m. in New York, the most intraday since March and second-best performance in the Russell 2000 Index. Ripple’s digital currency XRP advanced 4 percent to $2.06, erasing an earlier decline of as much as 21 percent.
Companies such as MoneyGram typically use pre-funded accounts to fulfill customers’ transfers, which can tie up capital. Ripple’s blockchain technology and digital currency could move money far faster, the companies said in a statement Thursday. MoneyGram scrapped a deal to sell itself to Chinese financial-services giant Ant Financial earlier this month after failing to win regulatory approval.
“Ripple is at the forefront of blockchain technology,” Alex Holmes, chief executive officer of MoneyGram, said in the statement. “We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
The pilot project may not lead to MoneyGram adopting XRP, according to the statement. The companies also will evaluate whether MoneyGram will become one of Ripple’s payment partners.
Ripple created its virtual currency to allow banks to send client money on its network from Paris to Tokyo, for example, in a matter of minutes rather than days. The company says its transaction fees are much lower than those for traditional money transfer and competing crytpocurrencies like bitcoin. Ripple enables this by having a middleman convert euros to XRP in Paris and sending the XRP to Tokyo, where it is then converted to yen by another middleman.
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XRP has lost about a third of its value since last Thursday. Still, it’s up more than 700 percent in the past month and, with 38.7 billion XRP in circulation, it’s the third most-valuable digital asset, according to CoinMarketCap.com.