The Stellar Development Foundation (SDF) announced in a blog post yesterday that it had made an investment into international remittances specialist MoneyGram. While the value of the investment was undisclosed, it makes SDF a minority shareholder in MoneyGram and includes a seat on the company’s board of directors.
The money was sourced from SDF’s cash treasury, which is set aside to support the organization’s key operations, rather than the foundation’s Enterprise Fund, which is for investment into startups and early-stage companies.
SDF CEO and Executive Director, Denelle Dixon, will take the seat on MoneyGram’s board, saying that she was:
“proud to represent SDF among a diverse group of leaders in payments, financial services, and technology on the board who are excited to lend their expertise to strengthen and guide MGI’s digital strategy.”
In a tweet on the X platform, Dixon explained that the decision to invest, “was an easy one,” following, “an awesome few years working together.”
The Stellar Development Foundation officially started its commercial partnership with MoneyGram in 2021, although the two companies had been developing the tools which eventually became MoneyGram Access since 2019. MoneyGram Access is a product that enables users of third-party crypto wallets and exchanges to cash-in (deposit) and cash-out (withdrawal) of Stellar USDC.
In the two years since the commercial agreement with MoneyGram was signed, the Stellar network has become one of the largest providers of fiat-to-crypto on and off-ramps globally. These have taken many forms, often differing according to the customs and regulations of the region in which they are implemented.
For example, as we Observed just last month, to support a number of countries in sub-Saharan Africa, MoneyGram allows users of the Honeycoin app (powered by Stellar, of course) to deposit fiat to receive USDC and vice versa. This also extends to the UK, where many of the international remittances to these countries originate.
SDF’s investment in MoneyGram will bring with it expertize in the areas of digital money and blockchain technology, and also represents MoneyGram’s ongoing commitment to becoming a “digital-forward leader in fintech.”
Prior to the two companies’ official partnership in 2021, the Stellar Development Foundation was reportedly interested in buying Moneygram outright. It is unclear why it chose not to follow that path at the time, but just a few months after this the commercial agreement was signed, and the partnership will only strengthen with this latest investment deal.
Members Discussion