Brad Garlinghouse, chief executive of payment focused crypto company Ripple, has said that the firm has moved on from the euphoria of its partnership with remittances giant MoneyGram and is now planning for the future. According to a report from Yahoo! Finance, the deal with Ripple and MoneyGram saw the former get a 10 percent stake in the latter, while it can also make an additional $20 million investment within the next 24 months.
The deal also became a watershed moment for their partnership, as MoneyGram started using the xRapid liquid product from Ripple earlier this month. According to MoneyGram chief executive, Alex Holmes at the company’s earnings call for the second quarter of the year, this adoption was a central stipulation of their draw.
With the use of the xRapid tool, MoneyGram is looking to help speed up the speed of payment processing. The tool uses XRP, Ripples crypto asset, to facilitate quicker cash settlements from one currency to another. However, the use of this tool by Money Gram is especially peculiar; Ripple is partners with some other notable names in the financial industry (including American Express and Standard Chartered), but these companies aren’t obligated to use xRapid.
Given that xRapid is being peculiarly used by MoneyGram, it’s understandable that many would believe Ripple made this so on purpose.
However, Garlinghouse made it clear in his Yahoo! Finance interview that this is far from the case. In part, he said, ‘“I wouldn’t characterize it as an inducement […] we’re getting more and more customers to sign up and we’re seeing that value. If we want to accelerate that, we have the option of doing things that might be perceived and characterized by some as an inducement.”
In addition to that, the chief executive claimed that the high price Ripple paid was in a bid to convince private equity firm Thomas H. Lee Partners to sell the MoneyGram shares at market values. With MoneyGram stock trading significantly higher since the Ripple partnership, Garlinghouse then went on to predict that in a year from now, the partnership will be more of a big deal than anything in the crypto market so far; including the whitepaper for Facebook’s crypto-asset, Libra.
It’s pretty bold for Garllinghouse to say this. The Libra whitepaper has caused several controversies since it was released, with governments, private individuals, and more knowledgeable entities giving their takes on it. Talk of Libra has even made it to Capitol Hill, as David Marcus, Head of Facebook’s blockchain division, has already appeared before the United States Senate and House of Representatives.
Not to knock on Ripple or whatever the company seems to be planning in the future, but the probability of their MoneyGram partnership- or even xRapid- being bigger than Libra is a bit of a long shot. With an all-inclusive payment solution, Libra could get even more people to buy cryptocurrency, and there is a probability that it would disrupt banking as we know it.
However, that isn’t to say that it has been peaches for Libra as well. Facebook has had issues with convincing lawmakers and the general public that its past problems with security won’t be an issue with Libra. So, perhaps Garlinghouse was also right. If Libra gets blocked and is stopped from seeing the light of day, xRapid would technically be a bigger deal than it when August 2020 rolls by.