After winding down its business relationship with Ripple, global money transfer giant MoneyGram could soon be purchased by Stellar.
XLM Surges On News Of Stellar’s Potential MoneyGram Acquisition
According to a July 21 article on Bloomberg, the Stellar Development Foundation (SDF) is reportedly working on the possible takeover in partnership with Advent International, a Boston-based global private equity firm focused on international buyouts.
SDF is a non-profit organization created in 2014 to support the development of the Stellar Lumens ecosystem. Citing people with knowledge of the matter, Bloomberg reported that no final decision has been made yet and the talks may still fall apart.
Stellar Lumens (XLM) is used for cross border payments and remittances. In this regard, it bears many similarities to Ripple’s native cryptocurrency XRP — and it’s not a mere coincidence. The co-founder and CTO of Stellar, Jed McCaleb, was also part of Ripple’s founding team. He left Ripple in 2014 to develop Stellar after a disagreement with the other Ripple executives.
The break up, however, came with generous alimony for McCaleb. He received 9.5 billion XRP tokens for starting OpenCoin (which was later rebranded to Ripple Labs). After announcing intentions to sell all his XRP at a go, he was forced to sign an agreement by Ripple which limited the amount of coins he can sell per week in order to avoid impacting the price of XRP negatively.
All in all, the rumors that Stellar Development Foundation is interested in acquiring MoneyGram have pushed the price of the project’s native token, XLM, higher. The asset has skyrocketed by an eye-watering 18.31% on a 24-hour adjusted time frame. XLM is currently ranked as the 17th largest cryptocurrency by market capitalization.
What A Stellar Takeover Of MoneyGram Would Mean For Ripple
As we previously reported, MoneyGram ended its almost two-year partnership with Ripple after the San Francisco-headquartered blockchain payments firm was charged by United States Securities and Exchange Commission (SEC) with conducting a $1.3 billion unregistered securities offering.
Days later, Ripple filed with the SEC to offload all its stake in MoneyGram. In particular, the firm teamed with American multinational bank Jefferies Group to help sell roughly 8.3 million Moneygram (MGI) shares.
A Stellar acquisition of the 81-year-old remittance behemoth would be a brutal twist of fate for the beleaguered Ripple given the two cryptocurrency projects’ age-old rivalry.
Notably, rumors of a MoneyGram acquisition have been floating around for years. In 2017, for instance, Alibaba’s Ant Financial tried to buy MoneyGram for $880 million, later upping the offer to $1.2 billion. However, U.S. regulators under the Trump administration torpedoed the potential deal.
Additionally, reports last June indicated that Western Union had made a takeover offer for its smaller rival MoneyGram.