For MoneyGram, Fortune said, the partnership with Ripple "may provide a way to maintain its share of the money transfer market" amid competition from a new generation of low-priced Internet-based services like TransferWise. Newer blockchain technologies have the potential to revolutionize this process and optimize capital deployment. To execute cross-border payments today requires financial institutions to rely on a complex web of relationships with correspondent banks in other countries.
But relax, it's all part of the first steps in a whole new form of finance, says Ripple CEO Brad Garlinghouse, who recently had some words for Bitcoin and the other digital currencies that continue to think they're at war with traditional banking. Under the trial, MoneyGram will access and use Ripple's XRP.
Last June, Stefan Thomas, Ripple's chief technology officer, said that compared with the status quo of correspondent banking, XRP-based liquidity would seem like "gold that you can teleport into any vault in the world instantly". Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid. "We're hopeful it will increase efficiency and improve services to MoneyGram's customers", MoneyGram CEO Alex Holmes said.More news: Beijing weighs slowing, halting purchases of US Treasuries
Ripple provides one frictionless experience to send money globally using the power of blockchain.
Global payments is a growing market, particularly with mobile solutions increasingly coming on board.
"This notion of using digital currency as a form of bridge funding is not unique to XRP", Fortune said, noting that previous year, IBM and a consortium of banks in the South Pacific announced a blockchain transfer arrangement that uses a cryptocurrency called Stellar.
The news helped Ripple rebound after an early morning sell-off, which was in response to South Korean officials saying they are planning to ban trading in crypto.