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Non-profit organization Stellar Development Foundation is reportedly considering purchasing remittance giant MoneyGram.
Stellar Partners With Advent International
Stellar is said to be working with private equity firm Advent International on the potential acquisition of MoneyGram, per reports from Bloomberg. Details of the planned acquisition are still unknown as no final decision has been made. Stellar and Advent could still choose not to proceed with the deal, said people familiar with the matter. Stellar Foundation is the organization that oversees the Stellar network, a blockchain platform for facilitating cross-border payments. This news of the potential acquisition of MoneyGram by Stellar comes after Stellar’s rival, Ripple, terminated their partnership with MoneyGram earlier this year. The two crypto projects’ rivalry has been ongoing since Ripple’s co-founder Jed McCaleb launched Stellar in 2014. This was right after McCaleb left the company due to a falling-out with other top executives. Both Ripple and Stellar are also focused on international funds remittance hence the competition. The Ripple and MoneyGram deal began in November 2019 when Ripple completed a $20 million stake in the firm. According to the agreement, MoneyGram was allowed to leverage Ripple’s product for cross-border payment and foreign exchange settlement. The partnership was initially set for two years, but the firms agreed to discontinue the partnership agreement a year later. This was after the US Securities and Exchange Commission sued Ripple over its allegedly illegal XRP sales last December. Meanwhile, the Stellar Foundation has been in the news recently. In May, the blockchain-based platform disclosed a $15 million investment in AirTM, a digital wallet and peer-to-peer exchange platform based in Mexico. The investment aims to boost the development of AirTM’s platform, with an integration with the Stellar blockchain network planned within the following year. Stellar invested in AirTM through its Enterprise Fund, an initiative to expand the Stellar network by investing in startups.
MoneyGram, A Constant Takeover Target
MoneyGram has been a takeover target, as rumors about potential acquisitions have been stirring for years. In 2017, a Chinese financial services conglomerate and an affiliate of Alibaba, Ant Group, agreed to buy MoneyGram. However, the deal fell through after the US government failed to approve the merger. According to CNBC, Alibaba and MoneyGram instead decided to form new strategic business cooperation to expand their remittance and digital payments services internationally. Last year, there were rumors that rival cross-border payment network Western Union had offered to acquire MoneyGram. Western Union had reportedly reached out to MoneyGram after being rivals for decades due to new competition from several younger, digital outfits. Both were said to have been affected by the Covid-19 pandemic. [deco-beg-single-coin-widget coin="XLM"]