Bad news cannot stop the blockchain
As the world rapidly embraces digital transformation, blockchain technology and cryptocurrencies are making significant inroads into the realm of global money transfers, according to Luther Maday, Head of Fintech Strategy and Innovation at MoneyGram.
However, the journey to mainstream adoption is challenged by one critical aspect: real-world applicability.
MoneyGram has been closely following the cryptocurrency space and recognizes the growing number of entities using these innovative technologies for cross-border transactions.
Although these enterprises are not yet directly linked to major players, Maday emphasizes the importance of achieving “the last mile” for mass adoption.
This “last mile” refers to the ability of individuals to seamlessly transfer cryptocurrencies and use them for everyday purchases, such as a loaf of bread.
Maday, who has over 15 years of experience in Fintech, Financial Services and blockchain, shared Cryptonews.com the importance of distinguishing between blockchain and cryptocurrencies.
In the case of MoneyGram, the focus remains on the limitless potential of blockchain technology to revolutionize the payments landscape.
First and foremost, blockchain excels in two key areas: speed and settlement.
In today’s global financial landscape, bank accounts are pre-funded across borders to facilitate the movement of money.
While consumers perceive these transactions to be immediate, the actual settlement takes several days.
With blockchain, settlements are made immediately.
The other notable feature of blockchain is the inherent transparency it offers.
The technology provides a mechanism to track and trace transactions, identifying both senders and receivers.
According to Maday, it is this traceability that holds enormous promise for the future of financial transactions.
How fast should we drive?
The Cryptoverse has seen several major events in 2022 and moving into 2023: market crashes, a number of companies failing, regulatory scrutiny and legal issues – just to name a few.
Addressing the potential impact of negative news cycles on cryptocurrency transfers and adoption, Maday acknowledged that they likely have “some effect.”
However, he also stressed that positive results can come from these challenges. From MoneyGram’s perspective, the events in question are seen as potentially beneficial.
Maday is convinced that “blockchain is here to stay,” and regulation will inevitably follow, although its exact form remains uncertain.
He emphasized the importance of regulation and protection in the crypto space.
While not elaborating on MoneyGram’s specific expectations for regulatory direction, Maday commented on the company’s interactions with regulators, noting that regulations are likely to be drafted in response to current market conditions.
To illustrate the necessity of regulators, Maday shared a common analogy: “What makes a car go fast? Most people say it’s the engine, the gas, the gas pedal. However, it’s the brakes on the car. Otherwise, we’d all be driving 5 km/ h.”
Acknowledging the learning curve for all parties involved, Maday added,
“It’s a new technology — we’re all learning, legislators too, they’re only human.”
Blockchain easily goes where few have gone before
On a global level, the world has been affected by the COVID-19 pandemic, followed by the Russian invasion of Ukraine, as well as the massive earthquakes in Turkey and Syria.
This may have also affected crypto adoption for remittance.
Per Maday, the way aid is being delivered to Ukrainian refugees, as well as earthquake victims, with the USD coin (USDC) stablecoin is particularly noteworthy.
“We notice that the use of USDC as an instrument for emergency relief is becoming somewhat easier and faster to deliver.”
In particular, it is not so much that the war in Ukraine helps this adoption, but that it is difficult to deliver aid to certain areas in general, he claimed.
Therefore, the combination of digital assets and MoneyGram in the modern world makes it easy to send aid where it would have been very difficult to do so in the past.
What is MoneyGram currently working on when it comes to the crypto space?
From a remittance perspective, the trend MoneyGram is trying to follow is use cases around stablecoins and central bank digital currencies (CBDCs), Maday said.
It is too early to see “who will come out on top” between the two, but the company will stay close to USDC and its partners – USDC Issuer Circle and Stellar Network.
Starting last June, MoneyGram launched a partnership with Stellar, enabling anyone with a Stellar wallet to go crypto-cash-crypto.
“It serves a large segment of the global population that is unbanked or underbanked,” Maday said.
Any on/off ramp that requires a bank account does not address the cash operating population.
“Our project allows these people to enter the industry,” he added.
For US customers, last November MoneyGram launched a new service that enables these users to buy, sell and hold Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) via its mobile app.
“Consumer reaction has been quite positive,” Maday said, without sharing specific numbers.
MoneyGram has witnessed “huge adoption” of the USDC in Latin America, where it acts as a hedge against inflation.
Despite geographical differences, Maday claims that technology itself knows no boundaries.
“The technique has no limitations. The technique knows no boundaries.”
But in terms of adoption, MoneyGram’s experience has revealed a correlation between countries with high inflation rates and their interest in alternative assets such as USDC.
This insight has been one of the most important lessons the company has learned in its ongoing exploration of the blockchain and cryptocurrency landscape.
____
Learn more:
– MoneyGram collaborates with the Stellar Development Foundation
– Leading Global Payments Network MoneyGram to provide cryptocurrency services
– MoneyGram to Support Transfers Via Stablecoins, CEO Says Crypto is ‘Clearly Here to Stay’
– MoneyGram hit with lawsuit over Ripple, XRP partnership
– What is blockchain technology?
– Different categories of cryptocurrencies
