US money-transfer company MoneyGram has made a long-term, minority stake investment in cryptocurrency ATM operator Coinme.
Founded in 2014, and also based in the US, Coinme operates a cryptocurrency-to-cash exchange through nearly 6,000 physical locations. Through a partnership with coin-cashing machine operator Coinstar, Coinme allows customers to buy bitcoin with cash and withdraw crypto holdings converted to cash from 20,000 brick-and-mortar ATMs in four countries.
MoneyGram has already teamed up with Coinme in May 2021 on a feature that lets Bitcoiners transact the cryptocurrency using regular ATMs in its locations across 49 US states and international markets.
The service operates very similarly to standard ATM transactions, while Coinstar technology enables cryptocurrency transfers to users’ existing wallets with a simple QR scan. The transaction price will be dependent on the Bitcoin exchange rate, which the ATM retrieves from the internet in real-time. Also, an additional percentage fee is charged by the ATM for the service and factored into the price.
At the time, MoneyGram said supporting Bitcoin at ATMs will be a valuable addition to the whole ecosystem, and it also noted that the service will only require a software upgrade as the method used is based on how the machine was configured by the owner.
The move came as financial services giants, including PayPal and Square, have been increasingly making moves in the crypto space.
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Coinme, which is the second-largest bitcoin ATM operator in the United States, is federally regulated through the Financial Crimes Enforcement Network, but state guidelines limit where they can actually set up shop.
Alex Holmes, Moneygram chairman and CEO, commented: At Moneygram, we continue to be bullish on the vast opportunities that exist in the ever-growing world of cryptocurrency and our ability to operate as a compliant bridge to connect digital assets to local fiat currency.
The Moneygram CEO added: “As we accelerate our innovation efforts, partnerships with startups like Coinme will further our position as the industry leader in the utilization of blockchain and similar technologies. “Our unique cash-to-bitcoin offering with Coinme, announced in May of 2021, opened our business to an entirely new customer segment, and we couldn’t be more pleased with our progress.”
MoneyGram’s recent investment came less than nine months after it officially cut ties with Ripple Labs in light of the ongoing legal fight with the US Securities & Exchange Commission. The two firms put their tie-up, which dates back to 2018, on hold after the SEC charged Ripple with conducting a $1.3 billion illegal securities offering.
Alongside a partnership to pilot Ripple’s XRP in cross-border payments, the token issuer bought a $30 million stake in MoneyGram in 2019. The Nasdaq-listed firm revealed it has netted more than $60 million in fees from using XRP transfers as an alternative source of revenues in both payment and settlement services
