Enter Ripple. The San Francisco startup is offering on-demand liquidity and rapid foreign exchange through XRP, theoretically allowing financial institutions to send payments around the world without the need for multiple corresponding accounts.
The move is significant because the arrangement involves the use of XRP, Ripple's digital currency, which has recently soared in value but also faced questions about its practical uses. The firm also boasts average transaction times for XRP of two to three seconds.
The goal of the pilot is to "move money as quickly as information", Brad Garlinghouse, CEO of Ripple, said in a statement.
Companies such as MoneyGram, the world's second-largest money-transfer business, typically use pre-funded accounts to fulfill customers' transfers, which can tie up capital.
MoneyGram shares rose more than 8 percent, to $13.15, after it announced the Ripple partnership.
"Every day blockchain technology is changing the norm and encouraging innovation". "We're hopeful it will increase efficiency and improve services to MoneyGram's customers", Holmes added. As part of the agreement, MoneyGram will pilot XRP in their payment flows and also explore integration into Ripple's ecosystem through xVia.
Ripple, a fintech startup focused on providing blockchain solution for payments, has the backing of numerous global banks and financial institutions, including Standard Chartered and the Royal Bank of Canada. Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid. In the past 24-hours, Ripple has surged by nearly 20% and at the price time, the cryptocurrency is trading at $2.09 with over $5 billion trading volumes and over $81 billion market cap.
Bitcoin wiped out more than $2000 in value after the initial announcement, but prices started pairing earlier losses, thanks to the intervention from the South Korean president. In November, the firm with American Express and Santander on a blockchain pilot to speed up cross-border payments between the United Kingdom and the U.S.