MoneyGram to Launch Non-Custodial Wallet Powered by Stellar Blockchain in Q1 2024

Global payments platform MoneyGram has announced plans to launch a non-custodial wallet in the first quarter of 2024, as stated by CEO Alex Holmes during the Stellar Development Foundation’s annual Meridian conference. This new wallet, developed in collaboration with Cheesecake Labs, will utilize the Stellar network along with MoneyGram’s fiat on and off-ramp services to enable instant transactions, free of charge until June 2024.

This initiative marks MoneyGram’s continued exploration of the cryptocurrency space, building on its partnership with the Stellar blockchain. Over the past five years, the company has undergone a digital transformation to address concerns that it might be overshadowed by cashless alternatives. In an interview, Holmes emphasized the shift in perceptions regarding the movement of money between fiat currencies.

The non-custodial wallet will enable users to leverage stablecoin technology for converting between fiat and digital currencies, enhancing MoneyGram’s focus on cross-border remittances and payment settlements. Users will have the capability to send digital assets to one another within the wallet, and they can also cash out their assets at any participating MoneyGram location. Additionally, all wallet users will benefit from global compliance screening tools, ensuring safer and more secure digital asset transactions.

Holmes pointed out that while cryptocurrencies are not expected to replace cash, they can address specific financial challenges. With the new wallet, users will be able to deposit cash and hold it as USDC, providing the flexibility to transfer funds into other currencies when desired. This feature could be particularly advantageous for individuals seeking to mitigate inflation risks or exchange rate fluctuations.

Unlike many non-custodial wallets where users manage their funds independently, MoneyGram’s wallet will incorporate stringent “know-your-customer” requirements and will only interact with other MoneyGram wallets. This design limits integration with the broader crypto ecosystem but also helps MoneyGram navigate regulatory scrutiny linked to decentralized finance.

Since launching its digital asset-to-fiat services in 2022, MoneyGram has expanded these offerings to eight digital wallets on the Stellar network, enabling consumers to cash out in over 180 countries and cash in across more than 30 countries.

The non-custodial wallet will initially be available in countries that have a capacity for KYC processes, with approximately 40 countries currently able to support a digital KYC framework. Holmes remarked that the company aims to transform MoneyGram into a global ATM concept using blockchain technology.

According to the company, the average global cost for consumers is around 3%, which is lower than the industry average of 6.3%. Digital transactions are typically cheaper, often below 1%, making them competitive with other cryptocurrency-powered remittance services.

The Stellar Development Foundation, which is collaborating with MoneyGram for the new wallet, also holds a minority stake in the firm, having acquired it in August of this year, which gives it a position on MoneyGram’s board of directors.