Brad Garlinghouse, the CEO of Ripple, says that he wants to use the company's "strong" balance sheet" to make further investments in the blockchain space.
The Ripple CEO's comments came during an interview with Yahoo Finance UK's Oscar Williams-Grut published on Friday (August 9).
Garlinghouse said that his company was working on multiple potential deals following the $30 million investment in MoneyGram, one of the largest global money transfer companies.
On June 17, MoneyGram issued a press release that stated that it had signed an agreement with cross-border payments specialist Ripple that would allow MoneyGram to use Ripple's XRP-powered product xRapid as part of MoneyGram's "cross-border payment process."
The announcement also mentioned that:
- this partnership would initially be two years;
- Ripple would become MoneyGram's "key partner for cross-border settlement using digital assets";
- Ripple had made "an initial investment of $30 million in MoneyGram equity";
- Ripple had "purchased the newly-issued common stock (including the shares underlying the warrant) from MoneyGram at $4.10 per share" (which was significantly higher than MoneyGram's stock price at the time); and
- MoneyGram has the option to make Ripple invest another $20 million (again, paying $4.10 per share).
The press release also nicely described MoneyGram's motivations for wanting to upgrade the technology for its cross-border payments process:
Today, MoneyGram relies on traditional foreign exchange markets to meet its settlement obligations, which require advance purchases of most currencies. Through this strategic partnership, MoneyGram will be able to settle key currencies and match the timing of funding with its settlement requirements, reducing operating costs, working capital needs and improving earnings and free cash flow.
This is what Garlinghouse told Fortune back then:
This will eliminate the need to deploy foreign bank accounts. That’s why MoneyGram has negative working capital. It will help customers and also smooth out their treasury operations.
Almost eight weeks later, Garlinghouse tells Yahoo Finance UK that there are more deals on the horizon:
We’re in a very strong position, our business is growing strongly, we have a strong balance sheet, and I intend to press our advantage.
Unfortunately, he did not provide any specific details on the potential deals he is currently working on:
Deal are always very, very hard to predict... Anything we can do to accelerate our growth and give us more capabilities that serve customer needs is a good place to be.
He went on to point out the extent of Ripple's investments in the blockchain space:
We’re probably the largest investor in blockchain and crypto on the planet. We’ve publicly announced we’ve made about $500m [of investments] in the space over the last 18 months.
Regarding the MoneyGram deal, this is what he had to say:
Moneygram is in a position where it has tremendous assets globally and the public market has not been particularly kind to Moneygram. The stock had gone way down and they had some pressure. We felt like we were in a position where we could help them, and they were in a position where they could help us.
He then gave an example of how xRapid could use as a bridge currency to make a payment from the UK to Mexico:
If you’re the Bank of Oscar and you’re holding £1 and you want to shoot a payment over to Mexico, you buy XRP with the pound, that takes fractions of a second on any digital exchange; you move the XRP to an exchange in Mexico, that takes about three seconds, there’s an exchange in Mexico we work with called BitSo; they now have the XRP, they sell the XRP, and they buy pesos.
Finally, Garlinghouse said that Moneygram is starting "with the US dollar to Mexican peso and the US dollar to Philippine peso pairings," and that these cross-border payments would "start to ramp in Q4."