Ripple CEO Brad Garlinghouse says the company’s new partnership with money transfer giant MoneyGram is a big step forward for emerging blockchain and crypto industry. MoneyGram will use Ripple’s cross-border payment product xRapid to settle cross-border payments using the digital asset XRP, according to a press release.
Ripple announced the strategic partnership with MoneyGram on Monday.
Garlinghouse told Bloomberg TV the partnership will help Ripple transform the cross-border payments industry.
“The deal is a big step for Ripple, but I think it’s even a bigger step for the overall industry. There’s been a lot of excitement around what blockchain and digital assets and crypto can mean for the industry and I think it’s the reason why players Facebook are diving in also. But we haven’t yet seen much beyond experimentation.
And at Ripple, I think we are the market leader because we have matured aggressively and we’re really solving real problems for real customers. MoneyGram is just the manifestation of that. And as the second largest global remittance company, we’re able to have a big impact with one customer and one partner in this.”
MoneyGram owns about 5% of the global remittance market, according to a 2017 report from Financial Times.
As part of the deal, Ripple will buy up to a 10% stake in MoneyGram at $4.10 a share. So far, Ripple’s investment is $30 million, and MoneyGram can decide to bring that number up to $50 million.
According to Garlinghouse, the company is focused on growing xRapid and expanding the number of payment routes available on the platform. Since launching in October of last year, Ripple has opened one xRapid route between Mexico and the Philippines.
“…with this new product around liquidity, we’re now enabling liquidity into the Mexican peso and the Philippine peso. We certainly expect to be much broader than that, but we’ve only been live with this product for about six or seven months. So we feel like we’ve made tremendous progress in a short amount of time. We’re going to continue to invest with the customers we have today as well as expand the number of corridors we have globally.”
As for Facebook’s entry into crypto, Garlinghouse says he thinks the social media giant will focus on consumer products and leave an open door for Ripple’s enterprise efforts.
“I think it’s an incredibly positive signal for the overall blockchain and crypto market to have a player like Facebook leaning in. I think there’s been obviously a lot of skepticism in the origins of crypto, coming from kind of an anti-government and anti-bank point of view. [But] to see major industry players lean in and participate I think is really positive for the overall market.
It will be really interesting to see what part of the market they focus on. David Marcus has been an incredible leader and given his experience at PayPal, I expect we’ll see them do something very consumer-y oriented – part of the payments system…
Facebook is obviously a consumer-oriented company. Instagram, WhatsApp. What Ripple is doing is really enterprise infrastructure and interconnecting various payment networks around the world. So we’re working with some of the biggest banks around the world, small payment providers and really providing that interoperability between the different networks as opposed to solving within a network kind of problem. So it’s really very different than what I expect they’re going to be doing.”