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The Stellar Development Foundation (SDF) – the entity responsible for the Stellar network that enables cross-border transactions – revealed its status as a minority investor in the payments leader MoneyGram International.
This recent investment marks the first of its kind from SDF’s treasury, which includes a seat on MGI’s Board of Directors. Denelle Dixon, SDF’s CEO and Executive Director, will take on this role, as stated in the official announcement.
Stellar x MoneyGram
The funding was drawn from SDF’s internal cash reserves, Dixon noted in a statement. This reserve is intended to support the operations of the non-profit organization rather than the Enterprise Fund, which focuses on investments in startups and emerging enterprises.
The executive indicated that this investment is anticipated to position SDF as a vital contributor in assisting MoneyGram with the growth of its digital operations, investigating blockchain technology, and enhancing the various methods the fintech company provides for consumers and businesses to transfer and manage funds in nearly every country worldwide.
“This is an exciting time for SDF and MGI, and I believe the opportunities will only grow. Continuing to build strong partnerships with organizations across the payments space puts SDF one step closer to achieving our mission of creating equitable access to financial services.”
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The collaboration between MoneyGram and SDF dates back to October 2021, when the two entities partnered to facilitate transactions using the USDC stablecoin for instant and cost-effective transactions.
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Bidding Ripple Adieu
The payments company had previously collaborated with Stellar’s direct competitor to utilize RippleNet as part of the exchange settlements process for international remittances. MoneyGram also received financial incentives in the form of XRP in return for granting Ripple an equity stake in the firm.
However, MoneyGram terminated its relationship with Ripple in March 2021, shortly after the SEC filed a lawsuit against the blockchain company concerning XRP. At that time, Ripple asserted that the decision to part ways was mutual and suggested a potential revival once the legal issues were resolved.
While Ripple achieved a partial victory against the SEC this year, MoneyGram has yet to reconsider the possibility of reinstating the partnership. Conversely, with SDF, the payments company announced intentions to provide stablecoin remittances last year.
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