Global remittance giant Moneygram recently revealed plans to launch cryptocurrency wallets, allowing users to transfer digital assets across its massive network. According to fintech experts like Adam Blumberg, this move carries major implications for financial services.
An Unexpected Embrace
Many predicted crypto would disrupt Moneygram’s business model. But instead of resisting, the company is integrating blockchain technology. “It’s Moneygram seeing that they are likely to be phased out by crypto that this is big competition,” explained Blumberg. “So they’re going to actually embrace it.”
A Boost for Stellar?
Interestingly, Moneygram chose to build its wallet offering on the Stellar network instead of alternatives like Ethereum. Stellar’s native Lumens (XLM) token powers transactions. As Blumberg analyzed, “We’ll have to see what this does to the value of the Stellar token should this wallet get launched and gain traction.” With Moneygram moving $14 billion across 150+ countries annually, even minor adoption could impact XLM significantly given Stellar’s $2 billion market cap.
Unlike PayPal’s crypto services, Moneygram’s focus appears to be enabling self-custody. “People will have to understand self-custody,” Blumberg noted. This spurs financial literacy. For Moneygram’s 115+ million users, blockchain integration brings perks like near-instant settlement and likely lower fees. But will they keep assets in wallets or cash out to fiat? As Blumberg highlighted, wider adoption means advisors must prepare to guide clients on topics like custody best practices and assessing Stellar’s emerging ecosystem.
Wider Business Landscape Implications
Ultimately, Moneygram’s embrace of crypto signals its inevitability. “We’re going to see more and eventually all financial transactions happening on chain,” projected Blumberg. As assets digitize, client needs change. Proactive advisors can lead this revolution.
Moneygram’s move also has ripple effects across the broader business landscape. It raises pressing questions: Will other legacy payments and finance players follow suit and integrate blockchain to avoid disruption, or is Moneygram an outlier? Incumbents face difficult choices. On one hand, embracing crypto risks commoditizing existing offerings. But resisting leaves the door open to agile startups.
Moneygram is opting for strategic adaptation on their own terms – leveraging their scale while assets digitize. Other remittance competitors like Western Union now face pressure to integrate crypto or riskrelevance. The same dilemmas confront many legacy businesses amid crypto’s rise. PayPal chose assimilation, adapting at the height of COVID uncertainty. Others like Walmart and BNY Mellon also integrate Bitcoin and blockchain proactively.
But obstacles persist around reconciling decentralized assets with traditional finance and banking’s compliance structure. Reluctance is understandable. While further integration seems inevitable long-term, the path forward remains messy and complex for all incumbents. Moneygram provides one blueprint – strategic adoption without overexposure. Their crypto wallet play is a calculated hedging of bets. How the strategy fares will be watched closely across industries grappling with disruption.