The purchase of Ripple in MoneyGram represents around 10% of the stocks
In a recent publication of Ripple Labs, a subsidiary of Ripple, it was announced that the company has decided to formalize an alliance with MoneyGram, which will add the official cryptocurrency of the startup (XRP) to its daily transactions platform, in order to offer more options to its users.
According to the official information, Ripple made a direct purchase of around 10% of the MoneyGram’s shares, with an approximate value of 4.10 USD per share. All of this represents a total investment of 50 million US dollars to make possible the project.
The alliance will benefit Ripple allowing users to have direct access to a tool called xRapid. This service facilitates and enables the option of making large foreign currencies exchanges in international markets. After the alliance, the exchange platform will use XRP as intermediary.
In this way, this alliance takes place one year after the direct competition of MoneyGram, Western Union, concluded a trial period with the xRapid tool; also ensuring that using XRP did not mean a significant cost reduction, which was planned during the test time.
The efforts of Ripple have been consistent and have also had other approaches in order to improve their operations. In the last three years, the company has made important agreements and has established several projects with banks, with the aim to grow together. However, they have not generated better conditions for XRP so far.
On the other hand, this recent purchase made by Ripple, oxygenates MoneyGram, which has already had great financial difficulties in recent months, since in the latest reports of the company there is evidence of large losses and the reduction of their finances, which led to a sudden fall in their shares in past months. A year ago, the government of the United States stopped the purchase of the company, drowning the company’s attempts to get out of financial difficulties.
It is known, through spokespersons of Ripple Labs, that the purchase of the shares will not represent taking decisions within the MoneyGram executive board. However, Ripple will have a permanent observer who will be on the executive boards of the company.
The Chief Financial Officer of MoneyGram, Larry Angelilli, said he feels comfortable with the incorporation of Ripple as a financial partner. He commented that it will bring benefits for both companies. “We are quite pleased with the terms of Ripple’s investment, which will support the company with permanent capital and additional liquidity”.
Angelilli also mentioned that this agreement will help MoneyGram maintain its operations. “This alliance also provides MoneyGram the opportunity to improve operational efficiency, increase profits and cash flow”.
It is important to note that although Ripple’s investment in MoneyGram is very high, it does not ensure the complete success of the XRP cryptocurrency in the international exchange market, but it represents another opportunity to improve its efficiency, presence in the markets and versatility.
By María Rodríguez
