MoneyGram made millions selling Ripple’s XRP

In its recently filed annual report to the US Securities and Exchange Commission, MoneyGram reports revenues of $ 11.3 million as a result of its Ripple partnership. Ripple Labs pays the removal company as an incentive to use RippleNet in their operations.

Ripple sales are growing rapidly

Although MoneyGram’s total revenue continues to decline, the Ripple acquisition has been clearly positive for the company. It started leveraging RippleNet’s on-demand liquidity (ODL) in the second quarter of last year, which is proving to be very successful.

The report says:

The company is compensated by Ripple in XRP for developing and providing liquidity in the forex markets, which is facilitated by the ODL platform and which provides a reliable level of forex trading activity.

Of the $ 11.3 million Ripple received, $ 8.9 million came in the fourth quarter. Given the overall growth of the Ripple platform, that number likely rose higher in 2020.

This activity is evidence that Ripple Labs is trying to use whatever means necessary to get financial institutions to use its service. Other partner institutions are also reported to be paid. In the case of MoneyGram, such payments are curious as Ripple Labs already owns a sizable percentage of the company. The agreement to use RippeNet expires in 2023.

All remittance companies have to adapt

MoneyGram’s acquisition of Ripple shows that the company recognizes the paradigm shift in the global financial sector. Blockchain assets are increasingly playing a role in global money transfer and threaten to make traditional remittance providers obsolete. In fact, eliminating the need for companies like MoneyGram is the central design feature of Bitcoin.

By aggressively attempting to partner with fiat-based financial institutions, Ripple Labs was an early outlier in the crypto space. Nonetheless, CEO Brad Garlinghouse has repeatedly asserted that crypto is best used, at least for now, as a complement to the legacy economy. In other words, Garlinghouse doesn’t see the central banks and the money that mint them going away anytime soon.

Ripple’s strategy of including banking partners in its ecosystem clearly works, but to what extent these institutions actually use RippleNet remains less clear. Few seem to have gone beyond the research phase. The fact that Ripple had to pay them to actually use it underscores this fact.

For now, both Ripple and MoneyGram will benefit from their alliance. Nonetheless, both companies undoubtedly know that much bigger changes will soon have a huge impact on their two core businesses.

What do you think of MoneyGram’s XRP sale? Let us know in the comments below.

Image via Bitcoinist Media Library

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