With more acceptance of digital currencies among the young population, one of the largest money-transfer services in the United States, MoneyGram, is setting its foot to maximize the benefits associated with digital currencies through stablecoins adoption.
Through a partnership with Stellar Blockchain, MoneyGram International Inc. is preparing to launch a service that will enable users to send stablecoins and convert them to fiat currency easily.
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Stellar Blockchain is a decentralized protocol specializing in cross-border transactions, and this partnership will help in closing the gap between fiat currencies and stablecoins.
In an interview with the Bloomberg, Alex Holmes, the Chief Executive Officer of Moneygram, said:
“The world of crypto and the world of fiat are not really compatible today,” he furthered by saying, “We’re trying to be a bridge from the crypto world to the fiat world.”
This development emerges when remittances are becoming more popular in the business world; at the same time when skepticism is surrounding the stablecoins as to whether stablecoins could keep maintaining their relationship with a commodity or currency like the US dollar.
According to Holmes, Once the service fully launches, users with digital wallets on the Stellar blockchain will be able to convert their holdings into Circle Internet Financial’s USDC stablecoin, which can then be cashed out through MoneyGram’s network.
TerraUSD stablecoin crash has raised so many questions on similar digital assets and has lead to market instability; despite the fact that UST is different from USDC (backed by dollar-equivalent assets kept in reserve), Terra collapse has raised concerns, and people now started to think that other stablecoins too could lose their peg.
Unlike UST, a de-pegging is not likely to happen with USDC, which is the stablecoin used in MoneyGram’s partnership with Stellar, as USDC is backed by safe liquid assets, says Dante Disparte, chief strategy officer and head of global policy for Circle.
“We’re not taking the dollar and putting it in the reserves and then lending it out,” he said in an interview. “Instead, the reserves are strictly cash and US Treasuries.”
Holmes in his words, said cryptocurrency “is obviously here to stay, and it’s going to be here for a long time despite recent selloffs and volatility,” he said. “I think adopting it, bringing it into the mainstream is important.”
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