Things are bound to get very interesting where RIpple and XRP are concerned. The payments company has forged a strategic partnership with MoneyGram, a company already looking into using one of its technology products for cheaper and faster money transfers. This new partnership will have some interesting consequences and will undoubtedly get people talking about what all of this means in the long run.
The Two-year Deal (Initially)
When a strategic partnership is formed between different companies, most people tend to think this is an agreement with an indefinite closure date. That is far from the case where this particular partnership is concerned. Ripple has confirmed it is a two-year deal, albeit that initial term can be extended later on. It will primarily depend on what both parties can bring to the table and whether or not the end results please everyone involved.
Although two years might not seem like much, it is still ample time to build a solid foundation for future collaborations. Considering how MoneyGram has already shown an interest in xRapid to speed up global remittance transfers, one also has to keep in mind both companies have been “working together” for some time already. Ripple is slated to become MoneyGram’s “key partner” for cross-border transfers, which shows that there is a lot more to this agreement than one might think.
The $50m Capital Commitment
One of the more interesting aspects regarding the Ripple-MoneyGram partnership is how the former company will provide a capital commitment of up to $50m. This does not mean Ripple is handing over $50m in cash to MoneyGram, although some enthusiasts might interpret it that way. Instead, this agreement will allow the remittance company to draw up to $50m in exchange for equity.
Such agreements are not uncommon in the financial world by any means. It is an extra layer of commitment between both parties to ensure the original deal is honored and everything is on the up-and-up. This $50m capital commitment will also last for the full two years, thus it will be rather interesting to see how this particular factor plays out in the long run. An interesting touch which further confirms both parties are very serious about this new collaboration.
A Stronger Focus on xRapid
As was somewhat to be expected, the main focus of this “renewed collaboration” is to further expand the use of xRapid. This technology stack developed by Ripple makes it possible to send nearly instant transactions around the world for a fraction of the current cost. Being able to send money from one currency and have it settled in a different one within seconds is something every money transfer service provider will benefit from in the long run.
According to the company, XRP will remain the most efficient digital asset for settlement with transaction fees at such low levels. This new partnership will further confirm whether or not that is indeed the case, as it seems likely a lot more thorough trials will be conducted in the years to come. What those trials will embody exactly, has yet to be determined at this time. As MoneyGram is a global company, there are a lot of possible avenues to explore in this regard.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
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Author: JP Buntinx