MoneyGram, a global payments platform, has announced the launch of a non-custodial wallet that will enable users to transfer funds between traditional fiat currency and USDC, a stablecoin pegged to the US dollar. This move represents MoneyGram’s latest venture into the world of cryptocurrency, as it continues its partnership with the Stellar blockchain to power its wallet. MoneyGram CEO Alex Holmes stated that the company has undergone a digital transformation in recent years to redefine how money is moved between different currencies, dispelling misconceptions that it would be replaced by cashless alternatives.
Remittances have long been seen as a crucial use case for the crypto industry, with the potential to revolutionize cross-border payments. However, challenges like slow processing times, expensive fees, and scalability limitations have hindered widespread adoption. While blockchain projects like Stellar and Ripple have aimed to prioritize cross-border payments, they have struggled due to adoption issues and regulatory uncertainty. MoneyGram has taken a unique approach by partnering with Stellar and developing a digital wallet that allows users to buy and hold cryptocurrency. However, Holmes remains cautious about the role of crypto, stating that cash will remain dominant.
The introduction of MoneyGram’s non-custodial wallet represents a further step into the world of digital assets. Unlike traditional money transfer services, users can now choose to hold their funds in a digital form, such as USDC, before deciding when to transfer them into a different currency. The new wallet will have “know-your-customer” requirements and will only be compatible with other MoneyGram wallets, limiting its functionality within the broader crypto ecosystem but also shielding the company from regulatory scrutiny. MoneyGram aims to reduce costs for consumers, with the average global cost currently at 3%, below the industry average of 6.3% reported by the World Bank.