Ripple Buys Adoption As No One Uses Its “Pointless” Token XRP: Alistair Milne On MoneyGram Partnership
- Digital Currency Group’s Alistair Milne – Ripple offered 50% of MoneyGram’s market cap just to have them use xRapid
- XRP price & MoneyGram’s shares jump but still down a great deal
- Ripple announced a major partnership with MoneyGram on Monday that will use the digital currency XRP as part of its day to day operations.
- As part of this deal, Ripple has made an investment of $30 million that involves buying MoneyGram shares at $4.10 a share to acquire 8 to 10 percent stake in MoneyGram.
The purchase of newly-issued shares of MoneyGram by Ripple is a significant premium on the share’s recent market price, that languished around $1.50. Additionally, Ripple will not receive a seat on MoneyGram’s board immediately, reportedly it will rather have observer status.
With this deal, San Francisco-based Ripple is making a case for its product called xRapid and digital asset XRP. Ripple has long argued that banks should use the cryptocurrency as a form of bridge currency rather than leaving money tied up in foreign accounts as collateral. However, due to XRP’s legal status being unclear, XRP didn’t make it part of the Ripple’s long list of partnerships.
“Ripple Offers *50%* Of MoneyGram's Entire Market cap just to get them to use their service.”
Just about a year back, MoneyGram’s rival Western Union completed a trial experiment with xRapid, stating the XRP transfer service has not generated any significant savings.
“We are always criticized that Western Union is not cost-efficient, blah blah blah, but we did not see that part of the efficiency yet during our tests,” Western Union CEO Hikmet Ersek told Fortune at that time. “The practical matter is it’s still too expensive.”
However, Asheesh Birla, Ripple’s senior vice president of product said the company sent just 10 payments using xRapid, far too few to reap any significant results.
“If they were to move volume at scale, then maybe you would see something, but with 10, it’s not surprising that they’re not seeing cost savings,” Birla said.
Over this partnership, Alistair Milne, CIO at Atlanta Digital Currency Fund took a jab at Ripple, saying,
“So Ripple offers *50%* of MoneyGram's entire market cap just to get them to use their service.”
“Ripple: no-one uses our pointless token so we're buying adoption now. MoneyGram: Woohuu, we were dying!! Exit pamp!” tweeted Milne.
Ripple is so awesome that they had to pay Moneygram $50 million – basically buying a controlling stake in the company – to force them to use their shit “solution”.
— Trolly McTrollface (@Tr0llyTr0llFace) June 17, 2019
In another event, Facebook’s Libra has been attributed by some as Ripple killer due to their overlapping markets.
Facebook is rumored to launch their cryptocurrency, Libra, tomorrow which many believe could render Ripple/XRP useless.
Ripple not going down without a fight though — they just agreed to invest $50M in MoneyGram to accelerate adoption.
The token wars are upon us!
— Pomp 🌪 (@APompliano) June 17, 2019
A Jump in Price But Still Down
In recent months, Brad Garlinhouse, CEO of Ripple claimed hundreds of partners are now using XRP. XRP is the third largest cryptocurrency by market capitalization of more than $18 billion.
Currently, XRP/USD is trading at $0.432 with 24 hours loss of 0.97 percent.
On the day the announcement was made, XRP rose 8 percent while MoneyGram shares’ jumped 150 percent.
Moneygram: +$82M market cap
WesternUnion: -$207M market cap
— TplusZero (@TplusZero) June 18, 2019
However, Milne pointed out, how in last 5 days, MoneyGram’s share price is in red by over 7% while down over 80% in the past 1 year and XRP is down by 89 percent from its all-time high.