Yesterday, news was posted on the official blog of crypto Stellar that the Stellar Development Foundation has invested in MoneyGram International.
Stellar Development Foundation (SDF) is a non-profit organisation founded in 2014 to support the development and growth of the Stellar open source network.
In particular, the foundation helps maintain the code base of the Stellar protocol, supports the technical and business communities, and is a partner for regulators and institutions.
MoneyGram International, on the other hand, is an American cross-border P2P money transfer company, founded in 1940 and based in Texas.
It has a turnover of almost a billion dollars, and hundreds of thousands of offices around the world.
Stellar’s crypto investment in MoneyGram
In fact, SDF’s partnership with MoneyGram officially began as early as 2021, and before that year they were already collaborating.
In fact, in 2019 they began creating the tools that eventually became MoneyGram Access.
During the recent go-private transaction with Madison Dearborn Partners (MDP), SDF became a minority investor in MoneyGram International. The investment was financed with the foundation’s cash funds, such as assets set aside to support the foundation’s operations, and the Enterprise Fund, a fund created to invest in start-ups and early-stage companies.
This is the first investment of its kind made by the SDF treasury.
Thanks to this investment, the Stellar foundation also obtained a seat on the board of MoneyGram, and in the future Stellar will contribute to MoneyGram’s development of digital business expansion, exploration of blockchain technology, and other ways to move and manage money in almost every country in the world.
The native crypto XLM
The Stellar network also has its own native cryptocurrency, XLM.
The news of the investment in MoneyGram has not had a positive effect on the price, which is actually losing 3% since yesterday.
This loss is actually due to a widespread drop in the crypto markets, led by Bitcoin, which is losing 0.7% today. All major altcoins are losing more than 1% today, and XLM is no exception.
XLM is a cryptocurrency that has been around for a long time, and belongs to the second generation of cryptocurrencies, the same as Ethereum for example.
Durin run, the one in 2021, its price did not record any new highs, as it held out at $0.94 in January 2018.
The current price is 86% lower than that high, and is also 80% lower than the 2021 high of $0.64 touched in May.
August so far has not been a good month, as it has fallen from $0.16 at the end of July to the current $0.13.
However, the current price is almost double that of the beginning of the year, although its growth has been concentrated in the last two months, i.e. from mid-June onwards.
XLM is closely related to Ripple’s XRP, because the two are very similar. The only real big difference is that Ripple is a company, while SDF is a foundation.
It is no coincidence that in the past few years it was Ripple itself that formed a strong partnership with MoneyGram.
The partnership between these two entities had been initiated in 2019, but following the SEC’s lawsuit against the company, accused of selling an unregistered security, it had ceased in March 2021. After a few months, the one with Stellar began.
MoneyGram deals with direct cross-border money transfers between people (P2P), in particular in multiple currencies. Therefore, it is more than logical that it would be interested in blockchain-based technologies, such as those offered by Ripple or Stellar.
However, Ripple was found guilty by the Southern District Court of New York of selling XRP on the primary market as an unregistered security, although the same court also ruled that XRP cannot be considered a security when traded on secondary markets.
Therefore, the problems for Ripple are not over, and this means that a blowback with MoneyGram is unlikely, at least in the short term.
At this point, it seems that Stellar, whose foundation has even become a minority shareholder in the company, has effectively taken Ripple’s place.