Previously last year, New York-based blockchain startup R3 Holdco LLC has sued rival company Ripple Labs Inc. over a contract to purchase Ripple's digital currency XRP, according to a lawsuit filed in the Delaware Chancery Court.
The company says XRP remains the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to Bitcoin fees of about $30 per transaction.
Ripple chief executive Brad Garlinghouse also mentioned that the partnership will help demonstrate XRP's usefulness in lowering costs for money transfers between friends and families. Newer blockchain technologies have the potential to revolutionize this process and optimize capital deployment. The companies also will evaluate whether MoneyGram will become one of Ripple's payment partners. "By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information". Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid.
"We are excited about this pilot and a long-term strategic partnership with MoneyGram".
For MoneyGram, the tie-up with Ripple may provide a way to maintain its share of the money transfer market.
Global payments is a growing market, particularly with mobile solutions increasingly coming on board.
International Payments is a multi-billion dollar industry and the current way of using a centralized authority who hold enough foreign reserves to be able to facilitate the cross-border transfers is very inefficient considering the time and cost involved.
The price of Ripple's XRP cryptocurrency keeps tumbling, having lost more than half of its value in less than a week.
Garlinghouse, however, makes the case that XRP obviates the need for money transfer shops to maintain local currency accounts (so-called nostro and vostro accounts) in far-flung locations.