XRP and MoneyGram: Why Ripple Paid $61.5M and the Deal Ended

Another mainstream adoption of cryptocurrencies and this time it is MoneyGram getting in on the action. Shares of MoneyGram climbed the most in 10 months after saying it was working with the blockchain startup Ripple. It'll be testing the use of cryptocurrency to move funds.

January 2018, one of the biggest money transfer companies on the planet says it's going to test XRP. Then in March 2021, it was over. Here's the part that got far less attention than the hype. Ripple didn't just sign Moneygram up. It actually bought a stake in the company for $50 million.

And on top of that, it actually paid MoneyGram $61.5 million in what were called market development fees. So, was MoneyGram a real win for XRP or was it bought? And why did it end? These are questions that everyone's asking, right? And the answer is in MoneyGram's own filing.

And it's far more useful than the hype or the hate. Because once you understand this one deal, you'll actually read every partnership headline differently. We'll go in order, right? how it started, what the money was for, and what Money Gram said it used XRP for, why it ended, and where both companies are now. As always, guys, this is not financial advice. All right, please do your own research.

Hey, bull runners, welcome back. If you're new to the channel, my name is George Lee and we're going to be going into Moneygram's filings. All right, but first, I want you to understand that everything I speak about here is purely opinion and research that I've done myself. My opinion is based off years and years of learning how to research and where I learned that was in the link in the description. So when I bring this up halfway through the video that there's a link down there that could seriously put you in a different position of where your financial situation is now.

It's not because I'm trying to direct you to a link just for the fun of it. It's because I've lived through it and I'm now showing the world that if you take the right steps, listen to the right people, you can make the right decisions for yourself. And that's all it is. So get ready for that coming free. But first, why moneygram?

If you've ever sent money abroad to from a supermarket counter, then there's a good chance it went through MoneyGram or its big rival, Western Union. I know everyone knows that. Here's MoneyGram's chief executive at the time. All right. Alex Holmes on Bloomberg in October 2018.

Watch this.

Yeah, absolutely. Yeah. You know, the global money transfer industry is is basically the idea of of moving money from country to country around the world. And it's a $600 billion industry. Uh very exciting because about one in eight people in the world are migrants.

And there's, you know, over uh several hundred million people moving around every year looking for opportunity uh and the need to send money back home.

$600 billion a year, much of it sent home by people working abroad. And this next bit is why Ripple wanted Moneygram so badly. Watch this clip.

What we're doing is really, you know, pivoting our strategy. You know, globally, we have been one of the largest money transfer providers over 200 countries. Uh but that's been distributed through about 350,000 physical locations. And so what we're really good at is getting money from point A to point B real time um and paying that out in cash and receiving it in cash. Uh as the world has changed, as mobile technologies have increased globally, consumers access to uh accounts has changed, as digital wallets have grown around the world, bank account access has increased.

And so we're changing our business model and changing our strategy. We are very focused on becoming much more consumer centric, putting in relevant innovations into the market um and beginning to give consumers the opportunity to transact through mobile devices online, send money into bank accounts, send money into mobile wallets.

Company under pressure, pressure to change and look at the core of the business. All right, point A to point B in more than 200 countries do that. A company like Moneygram has to actually keep money sitting ready in local currencies all over the world. So the cash is there when your family walks in to collect it. Pesos in Mexico, rupees in India and so on, right?

Money parked in advance just in case that money is tied up and doing nothing. It can't be invested. It can't be used for anything else and it has to be topped up constantly for a money transfer company. That's a big big hidden cost and freeing it up was Ripple's whole pitch. The idea was simple.

All right. The idea was instead of keeping Pesos parked in Mexico in advance, MoneyGram could buy XRP with dollars, send it across in seconds, then sell it for Pesos in Mexico. No money waiting around. XRP has only held for a few seconds. So, its price barely has time to move.

Now, we move on to the 11th of January because this is an important part. 2018, two companies have announced a pilot. Garlinghouse said that using a digital asset like XRP that settles in 3 seconds or less, MoneyGram could move money as quickly as information. Holmes was more careful. He said they were hopeful.

That word matters, right? And we'll come back to it. That same day, Bloomberg's editor at large said something that turned out to be the real story. Let's watch this together. If you are are a foreign worker working in the US and you're trying to get money home to your family, you you go to the the the 7-Eleven and try to transfer money using using uh Moneygram, using Western Union, a Western Union store, the fees are enormous and outrageous and the process is slow.

The idea that you could move money like you could move email is a dream and that's what Bitcoin seem to promise. That's certainly what Ripple seems to promise. Moneygram and Ripple are absolutely in competition with each other. To see these two businesses come together and see MoneyGram look at a way to move money faster is an amazing thing. It will give them a leg up over competitors like Western Union, but it also massively erodess their business model.

It's interesting to see these guys, I think, probably smartly recognize that they've got to get ahead of this train or they're going to be under the tracks.

Fees that are enormous and outrageous get ahead of the train or they end up under the tracks. Now, that was Cory Johnson's read and worth knowing. About 8 weeks later, he left Bloomberg to become Ripple's chief marketed strategist. His point stands though, right? Money wasn't joining Ripple because it loved crypto.

It was protecting itself. Now, keep that in mind because it explains almost everything that happened next. On the 17th of June 2019, the pilot became a proper deal. Ripple bought $30 million of MoneyGram shares at $410 each, and MoneyGram could ask for it up to 20 million more. In return, MoneyGram would use Ripple's products, then called XRapid, which used XRP to settle foreign exchange and crossber payments.

Garlinghouse actually called it an industrydefining milestone. The market loved it. The next morning, MoneyGram shares jumped as much as 155% in early trading. Now, by the 26th of November 2019, Ripple had put in the full 50 million for just under 10% of the company. And it wasn't only paperwork, right?

Coindesk reported that by then roughly 10% of Money Ground's Mexican peso foreign exchange volume was going through Ripple's service. A few weeks earlier, Garlinghouse actually posted that MoneyGram was getting settlement in about 60 seconds from dollars to Mexican pesos. And that preunded account would become the thing of the past for XRP holders. That was the dream. Back in June, so many fans had piled into Money Grounds replies that its own account spent about 2 weeks posting the same answers.

Questions about Ripple partnership? Please contact our media team. That's pretty much it. But there was a second stream of money and it went the other way. In MoneyGram's filings, there's a line called market development fees.

Moneygram's own annual report for 2019 described them as a compensation for providing liquidity to Ripple's own demand liquid network. Now, in plain English, Ripple paid Moneygram to use the service. Look at the numbers, right? 11.3 million in the second half of 2019, 16.6 million in the first three months of 2020, 15.1 million in the next 3 months, and by the time it ended, $61.5 million in total. So, Ripple paid Moneygram more fees than it invested in MoneyGram shares.

Now, you can read that two ways, and I want to give you both very honestly. The harsh reading is that the volume was paid for. All right? Moneygram was using XRP because Ripple made it worth their while, not because it was cheaper on its own. The fairer reading is that every new payment network has to actually have a kickstart.

Somebody has to go first while the market is still thin. And Ripple was paying to build liquidity until the route could actually stand on its own feet. Both readings are true at the same time. And that's the real lesson here, right? A partnership headline tells you nothing about who's paying whom.

Now, back when this deal was the big story, I remember how easy it was to treat every partnership as proof. Big name, big logo, XRP in the press release. I never thought to ask who was paying. These days, that's the first thing I look for. And that's the kind of digging we actually do together on a call.

Pulling apart a deal like this one, working out what's real demand and what's marketing and how it actually should shape the way that you hold XRP. Now, guys, scroll down to the description, click that link that I spoke about, watch the free training, then press the button underneath it, answer a few questions. roughly takes a minute. Then you can pick a slot that suits you, guys. It takes less than a minute to do this. All right?

And you could literally change the way that you're looking at the future of your financial situation. It doesn't mean that every result you see in this group, you might see people winning big. It doesn't mean that you're going to exactly win what they're going to win. What it means is you're going to get the same information. You're going to get the same mentorship.

You're going to be in the right room reading the right things, knowing what's going on behind the headlines. If that wants to be you, all you got to do is click that link. So guys, let's get back into the video. I don't want to drag that on, but I do want to make sure that you know how important it is to be in the right room at the right time. Now, towards the end of 2020, MoneyGram shares had climbed well above what Ripple paid in late November 2020, Ripple said it would sell about a third of its stake after the shares had closed at $742.

Well, above the $410 it paid. Ripple called it a Judy's decision to realize some gains. Then, on the 22nd of December 2020, the SEC sued Ripple, claiming XRP had been sold as an unregistered security. That day, Garlinghouse went on CNBC. Check this out.

Ripple as a company as Kate introduced we have shareholders. We've raised capital from venture capitalists from actually institutions and even banks like standard charter is a shareholder. XRP is a separate thing altogether. It is a currency that trades in the marketplace. A separate thing to altogether right he actually went further.

Check this out.

One of the ironies of all of this is that for XRP to be a security of a company the company has to exist. And the point that I have made at various times is that if Ripple the company didn't exist, XRP would still thrive around the globe with, you know, a couple hundred exchanges around the world and there's over a hundred different projects, innovative entrepreneurs here in the US and around the world building on top of XRP.

He also argued that XRP was being treated differently from its rivals. Now, watch this next clip. XRP, however, is almost undistinguishable from the what is Ether in terms of its decentralization, in terms of the breadth of activity. It's traded on a couple hundred exchanges around the world. And what's amazing to me is not a single other current country anywhere has looked at XRP as a security.

You've had countries like the UK and Japan and Switzerland and Singapore all come out and say things that are make it clear that XRP is a currency. and he warned that the case was about far more than one company.

The SEC is really picking winners. They're saying there's a duopoly of Bitcoin and Ether are the two digital assets, the cryptocurrencies that will be not regulated by the SEC here in the United States. And it really, I think, sends an ominous sign for innovation around cryptocurrency in the United States. Now, put yourself in Moneygram's shoes. It was a company listed on the stock market with shareholders, auditors, and regulatories of its own. and its biggest crypto partner actually just had been accused by America's markets regator of selling an unregistered security for a listed company that's actually exactly the kind of risk the board wants gone.

Now that was Ripple's answer. Okay, now look at Moneygrams a day later on the 23rd of December 2020. It said it hadn't been told of any negative impact on its agreement with Ripple. But then it went out of its way to say three things. One, it used Ripple's platform for buying and selling for currencies.

Number two, it had kept using its other traditional foreign exchange partners the whole time, and it wasn't actually dependent on Ripple. Number three, it did not use Ripple's platform for direct transfers of customers money. Read that again, cuz when you sent money through MoneyGram, your transfer didn't just travel as XRP. XRP sat in the background in MoneyGram's own currency trading for four currencies. Real use, yes, but much narrower than the post made it sound.

Two months later, on the 22nd of February 2021, MoneyGram said that because of the uncertainty of Ripple's lawsuit, it had suspended trading on Ripple's platform and actually wasn't planning on any of those fees for the first quarter of 2021. And on the 8th of March, the two companies announced they would wind the partnership down. Garlinghouse posted that both were committed to reinvesting it in the future. And in the next post, he blamed the lack of a crypto rule book in America. Said billions of dollars had actually been sent and settled across borders through Ripple service using XRP.

All right. So, what happened after the breakup? Well, MoneyGram didn't give up on the blockchain, right? On the 6th of October 2021, it announced a partnership with Stella Development Foundation using circles dollar stable coin USDC. And on the 2nd of June 2026, it launched its own dollar stable coin, MGUSD.

On Stella, notice what MoneyGram chose. Not a coin that moves in price, but digital dollars. Remember homes in 2018? Hopeful. What MoneyGram seems to have wanted all along was faster payments without price risk or legal risk.

And here's the twist. Ripple has moved into that lane, too. In December 2024, it launches its own dollar stable coin, RLUSD. So, Ripple now offers the very thing MoneyGram went elsewhere for. Alongside XRP, it means the next Moneygram doesn't have to pick between speed and a coin that moves the price.

It can use Ripple for both choosing XRP for some roots and digital dollars for others. And Ripple, the lawsuit it was fighting when MoneyGram walked away went its way on the question that mattered the most. On the 13th of July 2023, remember Judge Torres ruled that Ripple's sales of XRP and exchanges were not securities offerings. While it sales straight to institutional buyers were, the next day Garlinghouse was back on CNBC. Watch this.

Two and a half years ago when this the SEC first sued us, we said publicly that this wasn't just an attack on Ripple. It was an attack on the entire crypto industry. And I think we did see that play out with the SEC getting more and more aggressive and really trying to you regulate through enforcement, which we clearly don't think is a healthy way to do it. I think this is a huge win, not just for Ripple, but for the whole industry.

And he said what the industry actually needed next. Check this out. And it hopefully it also drives uh the legislative process because it doesn't make sense to try to regulate this through enforcement, but rather let's have clear laws about this that uh allow rules of the road for all entrepreneurs.

Clear laws. Now, that's exactly what Money Graham had been missing. And when he was challenged on whether the ruling really settled anything, he pushed back. Look at this.

But look, John, I'll take I'll take the other side of some of what you said. There is now clarity. The rule of law in the United States is clear that XRP is not a security when traded on exchanges when used for payment. There's a whole bunch of things in the in the judge's ruling that make it very clear about XRP. In August 2025, both sides dropped their appeals and the case was finally over.

With a $125 million penalty left in place, so the exact reason Moneygram gave for walking away, the uncertainty of Ripple's lawsuit no longer exists. And yet, as far as the public record shows, the revisit Garlinghouse mentioned in 2021 has not even happened. So, before the verdict, here's something you can use on the next big announcement. Three questions, all taken straight from the Moneygram story. Question number one, who is paying who?

With MoneyGram, the headline said a big company was using XRP. The filing showed Ripple was paying it tens of millions to do so. Neither fact cancels out the other, but you need both. Now, question number two, whose money actually moves? Moneygram said that in writing this customers money wasn't being sent through Ripple's platform.

XRP was used in its own currency trading. Now for four currencies that is that's a very different thing from millions of people transferring running on XRP. Now question three, would it carry on without the incentive? That's the one that really tells you if demand is real. With MoneyGram the fees stop and the usage stopped at the same moment because the lawsuit arrived at the same time.

So we never actually got a clean answer. Now, that's why the next test, a company using XRP with no lawsuit hanging over it and no fees being paid is the one worth watching for. So, what does all this actually tell an XRP holder? All right, tells me four things, so it's probably going to relate to you. One, it worked.

In a narrow lane, a household name really did use XRP for part of its currency trading. And by late 2019, a meaningful slice of its peso volume went through it. The technology did what it said. Money went from dollars to pesos in about a minute without sitting in Mexico in advance. That's not nothing.

And anyone who tells you XRP has never been used by a major company is absolutely mental. Number two, the volume was paid for. $61.5 million in fees on top of a $50 million stake. When you see a partnership announced, ask who's paying who, and whether it would carry on if the payment stopped. Number three, legal risk ended it. The reason Money gave in writing was the lawsuit, not the technology.

That risk is behind Ripple now, which matters for every company that's thinking about using XRP. Number four, the customer wanted speed, not a coin. Moneygram ended up with digital dollars on another network. Ripple's own pitch has shifted the same way. Doesn't sell XRP as the only way.

It sells faster payments for banks and payment firms with XRP as one of the tools. Here's how Monica Long, the one of Ripple's senior vice presidents and later this president put it in 2019. While Money Ground was still on board, watch this clip.

Many in the industry like Ripple, we have partner we partner with uh financial institutions versus seeking to replace them. We look at digital currency as a complement to major currencies like the US dollar. Again, not a replacement.

And she pointed to how many firms Ripple was already working with. Watch this.

We're well beyond the days of Silk Road by by now. And you know, companies like Ripple where we've already partnered with more than 200 financial institutions worldwide. Financial institutions who are regulated and already are complying with uh with existing law.

A compliment, not a replacement. All right. And that's the honest shape of the XLP story. It's not the giant flip in a switch, but lots of payment firms choosing XRP when it's the best route. And it's something else when it isn't.

And the lesson from MoneyGram is how to tell the difference. Real demand keeps going when the incentive stop. So, here's my question to you. If you were running MoneyGram, now the lawsuit's over, would you go back to XRP or would you stick with digital dollars? Give me your answer and your reason right down in the comments.

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