According to newly released documents, blockchain startup Ripple has remittance giant MoneyGram $11.3 million in market development fees to incentivize the use of its payment solution, RippleNet.
Breaking Down Ripple’s Strategic Investment
The filing describes these payments as "revenue from Ripple," comprising $8.9 million in Q4 2019** and **$2.4 million in Q3 2019. MoneyGram clarified in its statement:
"Total revenue was $323.7 million, down 6% YoY. This excludes $8.9 million from Ripple, which—per recent SEC negotiations—will be classified as a hedging cost rather than income."
Historical earnings call transcripts reveal these payments compensate MoneyGram for liquidity provisioning and forex market development via RippleNet. CFO Lawrence Angelilli noted on November 1, 2019:
"We’re rewarded for enabling reliable FX liquidity. Q3 marked the first time we recorded this income stream."
MoneyGram’s Optimistic Roadmap with Ripple
CEO Alex Holmes confirmed plans to deepen RippleNet integration in 2020:
"Our transaction volume keeps growing, and we’re expanding into new corridors. We’ll also integrate RippleNet into account-to-account transfers, advancing real-time global settlements."
The partnership, announced in June 2019, included Ripple’s $50 million investment** in MoneyGram—$30 million for equity at $4.10/share (a premium over market price). Post-investment, MoneyGram adopted XRP** for cross-border settlements.
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FAQ: Ripple and MoneyGram Partnership
Q1: Why did Ripple pay MoneyGram?
A1: To accelerate RippleNet adoption by offsetting MoneyGram’s liquidity provisioning costs.
Q2: How is the $11.3 million categorized?
A2: As a hedging expense, not revenue, per SEC guidelines.
Q3: Will MoneyGram use XRP long-term?
A3: Yes—XRP remains integral for real-time settlements.
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Keywords: RippleNet, MoneyGram, XRP, market development fees, blockchain remittance, Ripple partnership, cross-border payments, liquidity provisioning
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