A three-way partnership between MoneyGram, an American cross-border P2P payments and money transfer company, the Stellar network, an open-source, decentralised protocol and Circle, a blockchain-focused financial services and payments company, has been announced.
Together they have launched Stellar Aid Assist, a blockchain-powered aid disbursement system that delivers relief funds quickly, affordably and efficiently to individuals in crisis.
Weighing up the pros and cons of digital currencies
In 2022, the idea of digital currencies is no longer a complete novelty. There has been a lot of discussion around its pros and cons – with the biggest drawback being anonymity. On the surface, it appears anonymity would provide criminals with a get-out-of-jail-free card, however, this isn’t the case.
Ian De Bode, a partner with McKinsey & Company in San Francisco discussed the legitimate reasons for keeping transactions private on a panel at Sibos 2022. He used the Ukrainian war as an example of how digital currencies could be properly used.
“A lot of people were willing to donate to the cause. However, they didn’t want that transaction tracked to their individual account,” explained De Bode.
Many individuals across the world used stablecoins to transfer hundreds of millions of dollars to support Ukraine’s military efforts. This was especially impactful when traditional financing options could not act quickly enough. The digital donors welcomed the anonymity, given the conflict environment.
Another step in aiding Ukraine
Stellar Aid Assist enhances existing cash assistance efforts by making it possible for organisations to distribute Circle’s USD Coin (USDC) directly into an individual’s digital wallet. USDC is a digital dollar backed by fully reserved assets. Then, individuals are able to convert their USDC into cash and withdraw funds at any time at MoneyGram locations around the world.
“In today’s rapidly evolving world, it can be expensive and time-intensive to set up operational structures and individual banking partnerships. These enable cash disbursements around the globe. Because of that, many nonprofits and NGOs have unfortunately faced limitations when looking to provide aid in times of crisis.” Said Alex Holmes, chairman and CEO at MoneyGram.
“MoneyGram has been used by millions around the world to secure life’s essentials for their families for over 80 years. Now, organisations can instantly scale their cash distribution efforts by leveraging our global licensure and infrastructure to pay out across our network.
“We’re thankful to work alongside the Stellar Development Foundation and humanitarian organisations around the world. Together we can help deploy aid quickly to families in need.”