Ripple

Interesting That MoneyGram Says It Does Not ‘Utilize the ODL Platform or RippleNet’

On Wednesday (December 23), one of Ripple’s strategic partners, MoneyGram International, Inc. (NASDAQ: MGI), issued a rather interesting public statement on the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple Labs Inc.

Californian FinTech company Ripple announced on 17 June 2019 that it entered into a strategic partnership with MoneyGram, one of the world’s largest money transfer companies. Here is how Ripple’s blog post explained the deal:

Through this partnership, which will have an initial term of two years, Ripple would become MoneyGram’s key partner for cross-border payment and foreign exchange settlement using digital assets. In conjunction with the partnership, Ripple has agreed to provide a capital commitment to MoneyGram, which enables the company to draw up to $50 million in exchange for equity over a two-year period.

Alex Holmes, MoneyGram’s CEO, said at the time:



Trough 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.

Then, on 2 August 2019, during his company’s Q2 2019 Earnings Call, Holmes said that MoneyGram had started “transacting on the Ripple xRapid platform”, and that “all signs point to this being a tremendously beneficial relationship for all parties involved.”

He then had this to say about the real-world performance of xRapid (now called ODL, which is short for On-Demand Liquidity):

We’re literally settling currencies in second, and to quote my friend Larry, this is really cool.

During MoneyGram’s Q3 2019 Earnings Call, which took place on 1 November 2019, once again, the MoneyGram CEO had some exciting news to report about his company’s partnership with Ripple.

He started by saying:

Today, we’ve integrated Ripple onto our standard Treasury process to execute foreign currency trades 24/7. Over the quarter, we’ve continued to increase our usage of Ripple’s on-demand liquidity product for a portion of our daily funding needs in Mexico.

He then went on to say:

As a result of this success, we’re working to expand the partnership to new corridors before the end of the year. Furthermore, we’re also in the process of developing a roadmap on potential new used cases to improve our digital payments offering.

Though this will take some time to achieve, we believe that we’ll lead the industry in accomplishing this vision and that our partnership with Ripple will be a competitive differentiator in the months and years ahead…

All of that was in 2019. But what about 2020? Has MoneyGram continued using Ripple’s XRP-powered ODL solution throughout this year?

Well, on December 16, Brad Garlinghouse, the CEO of Ripple, tweeted about his company’s partnership with MoneyGram, and how MoneyGram has “settled billions of $ globally using XRP in production.”

Then, six days later (i.e. on December 22), the US SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.”

The next days, MoneyGram issued a press release to seemingly distance itself from its strategic partner Ripple:

The Company has not currently been notified or been made aware of any negative impact to its commercial agreement with Ripple but will continue to monitor for any potential impact as developments in the lawsuit evolve.

 

MoneyGram has had a commercial agreement with Ripple since June 2019; this agreement represents the use of Ripple’s foreign exchange (FX) blockchain trading platform (ODL) for the purchase or sale of four currencies. MoneyGram has continued to utilize its other traditional FX trading counterparties throughout the term of the agreement with Ripple, and is not dependent on the Ripple platform to accomplish its FX trading needs.

As a reminder, MoneyGram does not utilize the ODL platform or RippleNet for direct transfers of consumer funds – digital or otherwise. Furthermore, MoneyGram is not a party to the SEC action.

What is highly interesting about this press release is the wording used makes it kind of sound like MoneyGram has never used any of Ripple’s XRP-powered solutions despite the company’s CEO singing the praises of XRP (and xRapid/ODL) at various times during the past 1.5 years.

If MoneyGram’s public statement is factually accurate, then it means that although it was using XRP via xRapid/ODL in the past, it is not currently using ODL or RippleNet “for direct transfers of consumer funds”, presumably because it is worried that if it were to continue using XRP, it might be negatively impacted in some way by its association with Ripple and XRP.

 

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

News Source

Advertisement
Advertisement