Ripple’s woes don’t seem to come to an end as amidst its ongoing lawsuit with the U.S. Securities and Exchange Commission (SEC), one of its major backers, has withdrawn its partnership. Global remittance giant MoneyGram announced earlier that it “is not planning for any benefit from Ripple market development fees in the first quarter,” hinting that it is putting its relationship with Ripple on hold.
However, Asheesh Birla, the general manager of RippleNet, has stated that there will be “a path forward” for resuming its partnership with the remittance company. In his statement, Birla said that MoneyGram had indeed ditched Ripple’s On-Demand Liquidity solution. But the companies are still bound by a “multi-year” contract.
MoneyGram has been implementing Ripple’s ODL in its daily operations since June 2019. Since then its use has grown to handle 10% of MoneyGram’s total transaction volume between the United States and Mexico.
Ripple and MoneyGram
Ripple has had close financial ties with the remittance giant since a $30 million investment in the company’s equity and a commercial agreement for cross-border settlement using digital assets early in 2019. Later in the year, Ripple further tightened the partnership with another investment of $20 million raising its stake in Moneygram to 9.95%.
Now, Birla has outlined that even if the Ripple-MoneyGram partnership isn’t restored, Ripple has “two dozen” other companies which are leveraging ODL, with more clients to come on board in the future.
ODL has been proven to be quite effective in reducing costs and delivery time for cross-border remittance. ODL saw massive growth throughout the last quarter of 2019. The platform handled 550% more value in Q4 of 2019 than it did in the previous quarter. Furthermore, it tripled its transaction volume over Q1 2020, while the USD value transacted using ODL increased by more than 294%.
Meanwhile, MoneyGram CEO Alex Holmes has also signaled that he would like to resume the partnership with Ripple, stating:
“We’re pausing those activities just more for [an] abundance of caution..than with any other concerns about it. We’ve had a great relationship with Ripple and it’d be great to continue to partner with them.”
On the other hand, former SEC Chair Mary Jo White has come forward to defend Ripple and its CEO in its ongoing lawsuit with the SEC. She has said the commission is “dead wrong” in this case.