MoneyGram to launch non-custodial wallet, turning remittances into global ATMs with blockchain

The international money transfer company MoneyGram announced that it will launch a non-custodial wallet to assist users in transferring funds between fiat currency and the USD-pegged stablecoin USDC. This wallet will operate on the Stellar blockchain.

MoneyGram Redefining the Transfer of Funds Between Fiat Currencies

MoneyGram CEO Alex Holmes stated in an interview with Fortune:

We are redefining the example of transferring funds between fiat currencies.

Founded in 1940, MoneyGram is headquartered in Texas, USA, and is an international money transfer company. MoneyGram's transfer method involves cooperation with agent banks in two regions for cross-border remittances without the involvement of intermediary banks, making it faster and more cost-effective in terms of speed and fees compared to traditional banks. It is a common channel for many migrant workers to send money back to their hometowns.

MoneyGram Early Adopter of Blockchain Technology

As early as 2019, MoneyGram partnered with Ripple to develop the foreign exchange market and provide liquidity for its ODL platform, expanding Ripple's ODL platform into foreign exchange transactions. However, this partnership ended when Ripple was sued by the SEC.

MoneyGram's new non-custodial wallet represents a more comprehensive foray into the digital asset world. Holmes stated that this represents the company's next experiment, using blockchain technology to allow users to transfer funds globally while understanding that they still ultimately need cash rather than cryptocurrencies.

In the past, through the platform's normal remittance service, users needed to choose the destination of the funds. In other words, if they were to send US dollars to Mexico to receive pesos, due to restrictions in global banking operations, they could not choose to hold the funds until the peso transfer was completed. Cryptocurrencies help solve this dilemma, as some users would like to avoid exchange rate fluctuations or combat inflation by holding funds in digital form in dollars. With a non-custodial wallet, users can deposit cash and hold funds in USDC form and then decide when to convert it to other currencies.

Requires KYC Verification and Only Compatible with MoneyGram Wallets

However, for regulatory purposes, MoneyGram's new product will require a full Know Your Customer (KYC) process and will only be compatible with other MoneyGram wallets. Currently, around 40 countries support the KYC process.

MoneyGram CEO Alex Holmes stated:

We are using blockchain to transform MoneyGram into the concept of a global ATM!