MoneyGram has received $15.1 million from Ripple in the second quarter of this year for providing liquidity to the company’s XRP cross-border settlement network, the On-Demand Liquidity (ODL) platform.
According to MoneyGram’s second-quarter results, the Texas-based remittances firm received the funds in what it called “market development fees,” which were offset by transaction expenses of $6.3 million, leading to a net benefit of $8.8 million.
The firm’s report reads:
[Second quarter’s financial results] Included an $8.8 million net benefit from Ripple market development fees of $15.1 million, partially offset by related transaction and trading expenses of $6.3 million
MoneyGram defined market development fees as the compensation received for providing liquidity to Ripple’s On-Demand Liquidity network, which users the XRP token to send funds across borders. The $15.1 million figures is smaller than the $16.6 million it received in the first quarter of the year. In total, Ripple paid MoneyGram $31.7 million in XRP incentives in the first quarter of this year.
TheBlock reports that MoneyGram receives its incentives in XRP based on the volume it does for Ripple’s platform, and that it does not hold any o the XRP tokens it receives, as a company spokesperson was quoted as saying they sell the tokens “as soon as we receive it.”
The partnership between Ripple and MoneyGram dates back to June 2019, when both firms agreed for MoneyGram to leverage XRP in forex settlements as part of its cross-border payment process. As part of the deal, at the time Ripple made an initial investment of $30 million in the firm, acquiring shares at a price of $4.1 per share, roughly three times the market value. Over the next two years, MoneyGram has the option to make Ripple invest another $20 million at the same price per share.
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