Thursday, January 21, 2021

Ripple Moves to Sell One-Third of Its Stake in MoneyGram for the First Time

Ripple, the cross-border payment behemoth, is selling one-third of its stake in MoneyGram, following its investment in the money transfer giant in 2019.

This was revealed in a filing submitted to the United States Securities and Exchange Commission on 27th November 2020. In the filing, Ripple revealed that it has authorized an unnamed financial institution to sell relatively 4 million shares of MoneyGram on its behalf by 31st March 2021.

After the sale, the payment firm will still have 2.3 million shares with MoneyGram and the right to purchase additional 5.9 million shares, making the shares of MoneyGram at its disposal 8.2 million.

Thus, based on the percentage stake, Ripple is selling about 33% of its shares in MoneyGram when the warrant shares are included. This implies that the firm still holds 67% of its stake.

Read Also: Western Union Moves to Acquire Ripple’s Strategic Partner MoneyGram

Speaking with The Block, a Ripple spokesperson said, “This is purely a judicious financial decision to realize some gains on Ripple’s MGI [Moneygram International] investment and is in no way a reflection of the current state of our partnership.”

The spokesperson added that “We will remain a significant shareholder in MoneyGram following the sale — they are clearly a leader in the global payments space in over 200 countries and territories. In just over a year, we’ve made incredible progress and look forward to continuing to work alongside MoneyGram to transform cross-border payments.”

The partnership between Ripple and MoneyGram

Ripple, the San Francisco based payment firm sealed a strategic partnership with MoneyGram in 2019, to utilize the digital token XRP in forex settlements as part of MoneyGram’s cross-border payments business.

In the widely publicized deal, Ripple invested $50 million in the money transfer giant. The partnership is slated to expire in July 2023.

Aside from the $50 million investment, Ripple often pays MoneyGram in XRP for using the crypto asset in its remittance transactions. As of the time of writing, the payment firm has paid about $52 million in XRP to MoneyGram for this service.

Read Also: CB Insights: Ripple Is the 4th Most Valuable VC-Backed Fintech in the World

As claimed by a MoneyGram spokesperson, all incentives in XRP received from Ripple are not held by the money transfer giant.

Solomon Odunayo
Solomon has a growing passion for writing, this propelled him to keenly work on Eagles News Media for about two years before delving into the cryptocurrency and Blockchain industry he finds more interesting. He worked as a crypto Journalist and Editor at NewsLogical before joining Herald Sheets, owing to the priceless experience he has accumulated since he became a contributor in the crypto community.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest Articles