Moneygram’s Stellar Plan

Shooting for the stars with a partnership that will incorporate USDC into their payment rails

Moneygram’s Stellar Plan

If you’ve ever needed to send a secure payment to a family member in another country, or to send a money order because the post office was closed and time was of the essence, chances are you know what Moneygram is. Formed in 1988 as a merger between Traveler’s Express and Integrated Payment Systems Inc, Moneygram has become a go-to solution for p2p payments, and has facilitated money transfers for over 30 years. Now they’re entering into the stablecoin market. The Dallas-based company announced on Wednesday that it is working with blockchain network, Stellar, to provide instant money transfers in USDC to create a stablecoin bridge between crypto and local currencies. CEO and executive director of the Stellar Development Foundation, Denelle Dixon, said in an interview that working with Moneygram “allows end consumers to have on- and off-ramps everywhere”.

This news does pack a bit of a sting for Moneygram’s former blockchain partner, Ripple — starting in 2019 Ripple’s xRapid product leveraged XRP as a real-time bridge between the sending and receiving of currencies for Moneygram. That partnership unraveled, though, when the SEC filed a lawsuit against Ripple claiming that they violated federal securities laws in selling the XRP cryptocurrency to retail consumers. On doing more business in the blockchain space, Moneygram’s CEO and chairman, Alex Holmes, has a progressive view and is optimistic, saying:

“United Texas bank is an established bank here and very focused on the opportunities in the crypto space. Not every bank is willing to step into the crypto world, and I think it says a lot about how progressive that bank is trying to be”.

However, the SEC has also issued a subpoena to Circle, who backs USDC, so we’ll see what happens there.

Nevertheless, we like your style, Moneygram — Keep shooting for the stars!

Soros the Surreptitious

  • “Cryptocurrency is a misnomer and is a typical bubble”

  • “Bitcoin is not a currency...”

  • “...it’s used mostly for tax evasion and for people and the rulers and dictatorships to build a nest egg abroad”

These are all statements made by billionaire, hedge fund manager and investor, George Soros. Like many of his hedge fund brothers and sisters in the business, Soros has never shied away from sharing his bold opinion on cryptocurrencies. And, surprise surprise, they are not on his list of favorite things — or so we thought. In an interview on Tuesday, Soros Fund Management CEO/CIO Dawn Fitzpatrick clarified that the institution does, indeed, own Bitcoin.

“From our perspective … we own some coins, not a lot …”

Not a lot. Even having ONE bitcoin is a lot. What is “some”, as defined by a fund of their standing?

Regardless, it stands to reason that those on the top usually like to stay there, and bitcoin has positioned itself as a new form of asset diversification that seems to have attracted the attention of many institutional players. But Soros’ fund claims that it’s not necessarily bitcoin that attracted them:

“… the coins themselves are less interesting than the use cases of DeFi and things like that,” Fitzpatrick continued.

Many in the crypto space saw the potential of this decentralization revolution long ago, and while they were buying into the grandfather of this decentralized movement, bitcoin, Soros was still calling it a bubble. It’s good that he too is starting to recognize that potential now.

The Soros Fund Management has slowly been revealing their transition into the crypto-verse after Fitzpatrick announced in March that the firm had begun actively investing in crypto firms such as Lukka and NYDIG. This confirmation of the firm actually owning bitcoin stands out, though. We wonder which crypto they’ll get into next.

SEC Stays On-Brand

In highly predictable fashion, the SEC has once again said “not now” to 4 bitcoin ETFs. It gave notice on Wednesday to Global X, WisdomTree, Kryptoin, and Valkyrie that its decisions on their applications for ETF approval have been delayed by 45-60 days.

It does not come as a shock; the SEC is infamously cautious about making any decisions around the EFT issue. Many suspect that this hesitancy has to do with complexities around what constitutes “SEC approved secure storage” when these ETFs are backed by actual bitcoin.

To this point, Gensler has oft repeated that bitcoin futures ETFs may have a better chance of gaining regulatory approval than those that invest in spot bitcoin. This is because many futures are cash-settled (like CME), so you don’t have to think about these custody issues.

Since Gensler’s comments, dozens of applications have been submitted that DO fit Gary’s preference, including Valkyrie in the recent batch of delayed decisions, which is the only ETF of the 4 that’s linked to the bitcoin futures market rather than bitcoin itself. But regarding the ultimate decision about Valkyrie — we’ll have to wait 45-60 days.

What’s Eating Gary Gensler?

Gary Gensler is frustrated. Say what you want about the man, but he walks a fine line between being the SEC’s main man and Congress’s red-headed step child. The SEC chairman took part in a House Financial Services Committee hearing on Tuesday and his stance on crypto regulation was scrutinized. Gensler has been repeatedly vocal about his belief that the thousands of cryptocurrencies in existence are almost surely securities.

However not everyone at the committee hearing agreed:

Rep. Tom Emmer (R-Minn.), chairman of the Congressional Blockchain Caucus, said that he considers most cryptos to already be defined as a commodity or currency.

Rep. Warren Davidson (R-Ohio) even asked Mr. Gensler to “...clarify when a token is sufficiently decentralized to no longer be a security”.
(While almost all of crypto feels there’s no clarity around this issue at all, Gensler assured us that the Howey Test spells out the answer unequivocally).

Gensler was clear, though, that the SEC will need additional funding so it can hire more staff and upgrade its data analytics software. He said “I know resources are tight, but it would help us to do our mission”.

As it seems like his mission is increasingly to become the “Sheriff of crypto” (thanks, Mike Novogratz), and drive innovation offshore so as to ensure compliance with archaic and outdated securities laws, perhaps Congress should think twice before handing over that funding.

The most important statement of the hearing, however, came when Rep. Ted Budd (R-N.C.) asked Gensler if the SEC were planning to impose similar bans on cryptocurrencies and mining akin to what China is doing. Mr. Gensler firmly said, “No, that would be up to Congress,” — and then Bitcoin soared to over $55,000 in 24 hours. *mic drop*

JPMorgan Chase McDuck & Co

Traditional gold has been the go-to asset to squirrel away in case of economic upheaval or inflation, like Winter is always coming; but recent analytics showed gold falling 6.5% during 2021 (but steadily hovering below $1,800 per ounce) and Bitcoin soaring to record highs — it seems big institutional investors are collecting some of those juicy Bitcoin acorns to start their own vault of digital gold.

JPMorgan Global Market Strategist Nikolaos Panigirtzoglou reported that institutional investors are now starting to “replace gold with bitcoin” and that the JPMorgan Chase will soon be offering clients a Bitcoin fund.

Panigirtzoglou notes that “bitcoin’s allure as an inflation hedge” is what brings institutional investors back to the crypto market. That’s definitely part of it, but bitcoin is also treated by many as a risk-on asset with a huge potential upside, and in an economic climate where inflation runs ever higher, people are looking for a chance of ever higher returns.

Furthermore, given this increased inflation, many consider the monetary policy of their governments to have failed them, and they would rather trust a decentralized money with a predetermined inflation schedule rather than the whim of a central banker.

If it’s a choice between inflation rapidly eroding the value of their stash, or being like Scrooge McDuck and collecting as much as they can of something that’s growing in value everyday, it seems institutional players are increasingly hoping that they too will have the satisfaction of swimming in multiplying riches.

By Will Sandoval, NBTV Associate Producer, and Naomi Brockwell.


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