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Blockchain startup Ripple buys $30 million stake in MoneyGram

Key Points
  • Blockchain firm Ripple has bought $30 million worth of shares and warrants in MoneyGram, the two companies said, as they partner to use Ripple's product for cross-border payment and foreign exchange settlement.
  • Ripple bought MoneyGram's stock at $4.10 per share, representing a premium of about 183% to its Monday closing price.
  • The partnership will focus on Ripple's xRapid, a platform for cross-border payments that uses XRP, a virtual currency powered by blockchain to send and receive currencies.
A MoneyGram office is seen in Bucharest, Romania on July 25, 2018.
Jaap Arriens | NurPhoto | Getty Images

Blockchain firm Ripple has bought $30 million worth of shares and warrants in MoneyGram International, the two companies said on Monday, as they partner to use Ripple's product for cross-border payment and foreign exchange settlement.

Ripple bought MoneyGram's stock at $4.10 per share, representing a premium of about 183% to its Monday closing price. The partnership will initially be for two years, MoneyGram said.

Shares of MoneyGram surged about 77% to $2.56 after the closing bell.

Ripple may also buy additional common stock or warrants for up to $20 million at a minimum price of $4.10 per share, MoneyGram said.

The partnership will focus on Ripple's xRapid, a platform for cross-border payments that uses XRP, a virtual currency powered by blockchain to send and receive currencies.

"Through Ripple's xRapid product, we will have the ability to instantly settle funds from U.S. dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management," MoneyGram Chief Executive Officer Alex Holmes said in a statement.

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Key Points
  • Ripple, one of Silicon Valley’s most valuable private companies, has an ambitious plan to take share of the $2 trillion cross-border payments business. Part of that plan involves the cryptocurrency XRP.
  • It’s the majority owner of XRP, often casually called “Ripple,” which fans defend with religious zeal.
  • Ripple faces multiple lawsuits by buyers of XRP, which has nosedived about 90 percent since its peak.
  • Still, Ripple’s CEO says 2018 was the best year on record as the company breaks the 200-customer threshold on Tuesday.