The partnership will see MoneyGram pilot the use of XRP through a new Ripple service, called xRapid, created to provide liquidity to financial institutions. As part of the agreement, MoneyGram will pilot XRP in their payment flows and also explore integration into Ripple's ecosystem through xVia. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets.
Money transfer companies, like MoneyGram, allow people to safely and efficiently send cross-border payments to friends, families and business partners.
"This notion of using digital currency as a form of bridge funding is not unique to XRP", Fortune said, noting that past year, IBM and a consortium of banks in the South Pacific announced a blockchain transfer arrangement that uses a cryptocurrency called Stellar.
"XRP remains the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to Bitcoin fees of about $30 per transaction. By using a digital asset like XRP that settles in three seconds or less, they [MoneyGram] can now move money as quickly as information".
Companies such as MoneyGram typically use pre-funded accounts to fulfill customers' transfers, which can tie up capital. It had reached a record-high of $3.65 per coin earlier this month, briefly making it the world's second-largest cryptocurrency by market value behind Bitcoin.
"Ripple is at the forefront of blockchain technology", Alex Holmes, chief executive officer of MoneyGram, said in the statement.
The partnership would see MoneyGram operate a pilot programme of xRapid, a new Ripple service.
The development follows last week's comment by Ripple that "3 of the top 5 global money transfer companies plan to use XRP in payment flows in 2018", which was meant to address the growing concerns over the lack of use of Ripple's native token.
The money transfer company clearly sees a lot of value in XRP... Ripple most recently announced it would be teaming up with Amex and Santander for a blockchain pilot to speed up payments between the USA and the United Kingdom.
The value of XRP surged nearly 15% to $2.22 on the announcement, according to Coinmarketcap data.