Ripple Invests up to $50 Million Into MoneyGram, Deal Involves Two Years of Usin

[sirty143]

Ripple Invests up to $50 Million Into MoneyGram,
Deal Involves Two Years of Using XRP and xRapid for Settlements

Blockchain-powered fintech startup Ripple will invest up to $50 million into publicly-traded money transfer company MoneyGram. As it turns out, the persistent rumors about Ripple planning to acquire MoneyGram were not entirely unfounded, but held a grain of truth.

According to the Wall Street Journal, the $50 million deal involves Ripple purchasing $30 million in MoneyGram stock and $20 million in warrants for newly-issued stock. Ripple paid $4.10 per share, and MoneyGram stock exploded today in after-hours trading – in the space of less than two hours, the stock surged from $1.43 to $3.5, where it is currently trading.

MoneyGram stock surges in after-hours trading. Image source: MarketWatch

Meanwhile, Ripple XRP, 1.64% is also seeing a spike, as the token quickly jumped from $0.42 to $0.45 shortly after the announcement was made public.

The deal involves MoneyGram using the XRP token

Even though developments concerning Ripple are not always necessarily connected to the XRP token, XRP holders will be pleased to hear that the partnership between the two companies will be focused on xRapid, at least according to Ripple. xRapid is a product developed by Ripple that uses XRP as a source of on-demand liquidity for cross-border transfers. Ripple states:

“The partnership with Ripple will focus on the xRapid product, a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency. It leverages XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies.”

The Wall Street Journal writes that MoneyGram and Ripple signed an agreement for the former to use XRP and xRapid for two years as part of the deal.

Of course, one could argue that Ripple is trying to buy its way into XRP being used to facilitate money transfers. It remains to be seen whether this will eventually help generate organic demand for XRP for purposes other than price speculation.