- Terra’s demise has raised fears that other stablecoins may lose their peg.
- Stellar blockchain digital wallet users will be able to convert their assets into USDC.
MoneyGram and the Stellar Development Foundation have teamed together to promote the use of digital currencies more broadly. Users will be able to transfer and convert stablecoins to fiat using the partnership’s service.
Exchange of Stablecoin For Fiat Currency
There has been a growing focus on stable coins, aiming to maintain a 1-to-1 relationship with a commodity or currency like the US dollar as remittances become more common in developing nations.
Stellar blockchain digital wallet users will be able to convert their assets into Circle’s USDC stablecoin once MoneyGram starts the service. MoneyGram may then be used to exchange the stablecoin for fiat currency.
Because of the collapse of TerraUSD stablecoin earlier this month, the stablecoin market has become volatile and untrustworthy. Terra’s demise has raised fears that other stablecoins may lose their peg due to their lack of a dollar-equivalent reserve like USDC. Despite the cryptocurrency market’s recent volatility, Holmes has emphasized that he remains optimistic about digital currencies. He argued that cryptocurrency use might be expanded to developing markets with the new service.
Ripple Labs, which earlier held a big bundle of MoneyGram’s shares, had a prior agreement with MoneyGram. Shortly after the Securities and Exchange Commission of the United States initiated a lawsuit against Ripple, the duo ended their connection. In March 2021, a class-action lawsuit was filed against MoneyGram due to the payment service’s engagement with Ripple.
In October 2021, MoneyGram and Stellar started collaborating, and a trial operation was introduced in November. Stellar was said to be interested in acquiring MoneyGram earlier that summer.