It has been difficult for the business to flourish because of a lack of reliable crypto on- and off-ramps—rails for quickly changing dollars, yen, euros, and other currencies into digital tokens.
While those in developed markets, such as the United States, with access to bank accounts and credit cards, can quickly shift money in and out of crypto, it’s considerably more difficult for those in developing nations.
Fortunately, the Stellar Development Foundation, which backs the Stellar Network, has come up with a solution to this issue.
Using a relationship with money transfer business MoneyGram, consumers may bring fiat currency to a MoneyGram facility, convert it to crypto, and change crypto back to fiat. On the Stellar network, the service will use the USDC stablecoin.
The programme, which is currently available in the United States, Canada, Kenya, and the Philippines, is an example of how new crypto markets and traditional finance are merging. Cryptocurrency’s integration into established financial institutions is also demonstrated here.
By the end of June, the partners hope to add crypto cash-outs to more than 200 MoneyGram nations.
Canonical Crypto CEO Anand Iyer said, “It’s an interesting and complex problem.” While Canonical Crypto hasn’t invested in Stellar, it’s keeping a close eye on the infrastructure sector. Having this deal in place is the only way to get additional crypto into the ecosystem. “It makes a lot of sense.”
As a result, if Stellar and MoneyGram are successful in their endeavour and demonstrate that they can bring in new users to the cryptocurrency space, they will serve as a role model for other businesses trying to expand their reach.
A Search for A Super-Anchor Is Underway
It is part of Stellar’s mission to make crypto accessible to people who are underprivileged or don’t have access to traditional financial services.
Denelle Dixon, CEO of Stellar Development Foundation, said, “From that aspect, this truly changes a significant amount and actually brings the cash-based world into the digital economy.” Users who have money are the ones we’re after, because we want to help them build their business.
Stellar has focused on payments from its inception in 2014. A small fraction of a penny is the normal fee for transactions on Stellar’s network, making it more affordable than comparable systems like Ethereum.
Since this enhances other uses such as payments, Dixon said, increasing accessibility is a means to overcome the notion that crypto is only for trading in today’s weak market.
The recent focus on stablecoins by Stellar is highlighted by the new product’s use of USDC rather than its native XLM token. Dixon sees stablecoins as the future of crypto payments. “We do not favour XLM over any other currency,” she stated. “In truth, stablecoins are what we prefer. “Stablecoins are a great way to leverage payments.”
It was not an easy task to bring together a traditional financial institution with a blockchain-based startup. It was in 2019 that MoneyGram and Stellar first started conversing, and it was via the creation of a “adapter” that the two firms demonstrated the compatibility of their respective systems.
In March of 2021, the firms began discussing the current product. Dixon informed MoneyGram CEO Alex Holmes in a critical meeting last summer that “the thing that had been missing in a number of different spaces is how much MoneyGram needs blockchain and crypto.”
Over the next few months, the product was developed, and a trial was launched in November. MoneyGram was able to rapidly expand because of its licences and operations in more than 420,000 locations across 200 countries and territories.
“MoneyGram’s ability to abstract out all the complexities,” said Stellar Development Foundation Vice President of Business Development Mark Heynen.
More access for retail users is needed for Stellar, despite the network seeing a 500% growth in payments in the last year. A network of regulated banks, money service companies, stablecoin issuers, and other on- and off-ramp providers was established in 2016 as the system’s first anchors. More than 50 anchors have joined the network in countries such as the Philippines and Brazil.
Although Stellar has a wide range of national and international anchors, not all of them have a physical cash-in or -out facility. Stellar will have MoneyGram as a type of super-anchor.
Cashing in Wallets
Using a compatible wallet, customers can send money to any MoneyGram location, and the money will be delivered as soon as they arrive. The agent uses the Stellar blockchain network to perform a MoneyGram transaction and deposit the monies into the customer’s digital wallet.
A number of self-custodial and noncustodial wallet options will be available at the start of Lobster’s rollout, including Vibrant, a competitor of Vibrant. Using USDC’s creator Circle as a bridge, and United Bank Texas as the go-between, both parties will be able to exchange money.
MoneyGram plans to give the service away for free for the first year in an effort to get more people to use it. According to Holmes, the cost of transactions will one day be comparable to the cost of purchasing and selling crypto or sending remittances. Global remittance fees for traditional money transfers in 2021 were estimated by the World Bank to be around 6% on average.
According to MoneyGram’s analysis, the Stellar partnership will both attract new crypto users and satisfy the needs of those who are already using the service.
Holmes observes a correlation between the high level of interest in cryptocurrency among Latinx communities and the high use of MoneyGram by immigrant populations. Because of the Stellar connection, MoneyGram may now accept payments from any other wallet on that network, bringing in new prospective clients.
Long-term, Holmes sees crypto as a tool for redefining money, not merely for money transactions. A stablecoin that is accessible to someone in Argentina is a little different than saying “I have to convert it all today” when I go to pick it up or put it into my bank account,” Holmes said. In the future, how money moves and does it really need to be quickly converted into fiat currency are interesting issues.
For More Information Visit Our Site : https://www.techllog.com/