MoneyGram Sells XRP as Soon as They Receive It

In a filing with the US Securities and Exchange Commission (US SEC), it is revealed that Ripple pays MoneyGram XRP as incentives for using Ripple’s On-Demand Liquidity (ODL) platform.

The ODL platform settles remittance payments in real-time. When the sender sends money, it is first converted to XRP to move across border. On the destination, that XRP is converted to the local fiat.

An interview with The Block reveals that MoneyGram liquidates its XRP as soon as it receives them from Ripple while also stating that it received $11.6 million worth of XRP as incentives last year. MoneyGram refers to this compensation as market development fees in their SEC filing.

Furthermore, MoneyGram accounts for the XRP they received as an “indefinite-lived intangible asset” and they measure it base on the fair market value of XRP. As per the terms of their agreement with Ripple for the usage of the ODL platform, MoneyGram is not paying fees to use it. There is also no clawback or refund provisions.

MoneyGram has partnered with Ripple for cross-border payments in June 2019. At the same time, Ripple bought a stake in the company worth $50 million. In using the ODL platform, MoneyGram said it expects this partnership will allow them to reduce their working capital needs, generate earnings, and provide cash flow.

Sources: The Block, The Daily Hodl, MoneyGram US SEC Filing

This article is published on BitPinas: MoneyGram Sells XRP as Soon as They Receive It