Cross border crypto payments network Stellar today announced an investment in major money transfer company MoneyGram International.
In a Tuesday statement, the foundation behind XLM said it had become a minority investor in MoneyGram using money from its own cash treasury.
The Stellar Development Foundation's Director of Communications and Public Affairs Ellen Canale told Decrypt that the "investment isn't specific to any particular work" but because "we are confident in the organization, management, and board, and the company's plans for the future focused on increasing MGI's digital investment and bringing value to the under and unbanked through digital experiences."
The Stellar Development Foundation did not reveal how much money it had invested in MoneyGram. XLM is the 24th biggest cryptocurrency by market cap, according to CoinGecko.
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Stellar said in its announcement that the money would be used "in areas such as expanding its digital business, exploring blockchain technology, and contributing to the many other ways this financial technology company enables consumers and businesses to move and manage money in nearly every country around the world."
"Most importantly, it signifies a rededication from MoneyGram International, one of the world's leading global financial technology, to becoming a digital-forward leader in fintech," the Stellar Development Foundation's CEO and executive director Denelle Dixon added.
MoneyGram International has been sued over false statements the company allegedly made regarding its partnership with fintech company Ripple Labs that involved the XRP token.
The class action lawsuit was filed on March 1 by Rosen Law Firm on behalf of MoneyGram’s investors who purchased shares in the company between June 17, 2019, and February 22, 2021.
The New York-based firm asserts that MoneyGram misled the investors about its partnership with Ripple and the legal status of the XRP token.
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The statement also said that Dixon now had a seat on MoneyGram's Board of Directors.
Stellar and MoneyGram have been working together for years.
Stellar aims to make cross-border payments faster and cheaper using blockchain technology. MoneyGram is one of the largest American remittance companies, competing with the likes of Western Union, Intermex and Euronet.
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The decision to invest in @MoneyGram was an easy one. After years of getting to know the business and the teams, we are excited to take part in MGI’s next chapter. It’s been an awesome few years working together, and we are excited for what’s next!https://t.co/PYAKHeXRxx
The two started working together two years ago and Stellar has since helped MoneyGram launch a cash-to-crypto service. Rumors swirled last year that Stellar was going to buy MoneyGram.
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