- MoneyGram has announced a non-custodial wallet to simplify fund transfers between fiat and USDC, building upon its Stellar partnership
- This development marks MoneyGram’s entry into the crypto wallet space and builds upon its four-plus years in the sector
- The wallet includes KYC checks to ensure regulatory compliance
Global payments platform MoneyGram is set to launch a non-custodial wallet aimed at simplifying the movement of funds between fiat currency and USDC. MoneyGram’s move into the crypto space builds upon its partnership with the Stellar blockchain to power this new wallet and allows it to plant a firmer foot into the crypto world. The new wallet will be non-custodial but will have ‘know your customer’ checks to ensure it complies with financial regulations.
Four Years in the Game
MoneyGram has been working on blockchain-based remittance solutions for at least four years having initially teamed up with Ripple to trial international payments on crypto rails. Since then it has expanded hugely, teaming up with USDC and Stellar to bring its plans to fruition, which now includes a non-custodial wallet.
MoneyGram’s traditional money transfer service typically requires users to specify a destination for their funds, leaving them with limited options for holding funds in between transactions. This limitation stems from constraints within the global banking system. MoneyGram’s non-custodial wallet addresses this challenge by allowing users to deposit cash and hold it as USDC, giving them the flexibility to decide when to convert it into another currency.
Non-custodial Wallet Will Still Have KYC
Unlike many non-custodial wallets, which grant users full control over their funds, MoneyGram’s product will impose know your customer requirements and will only be compatible with other MoneyGram wallets. While this may limit its integration with the broader crypto ecosystem, it also shields MoneyGram from the regulatory uncertainties often associated with DeFi products.
Remittance companies like MoneyGram and Western Union have been known for their high fees, but MoneyGram has been actively working to reduce costs. The company claims that its average global consumer cost is around 3%, lower than the industry average of 6.3% reported by the World Bank. Digital transactions, the company says, tend to be under 1%, making it competitive with other crypto-powered remittance services like Mexico’s Bitso.
Initially, the non-custodial wallet will be available in countries with the capacity for digital KYC processes, which currently includes approximately 40 nations.