Why MoneyGram built its own stablecoin instead of using someone else's

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The rising popularity of stablecoins is spurring many traditional money transfer companies to take another look at how they operate to take advantage of the speed and ease offered by blockchains. MoneyGram, which provides remittances and fund transfers across the world, saw the writing on the wall years ago, however. 

The company just this month launched MGUSD, a dollar-backed stablecoin that’s integrated into its app and global network, but  MoneyGram CEO Anthony Soohoo says the firm has been building a stablecoin strategy into its operations for the past five years. And this week, MoneyGram launched an active validator node on the Solana blockchain, and joined its institutional developer platform to deepen its involvement in the space. 

"A lot of times the industry starts with a technology, then they look for the problem," Soohoo said on StrataMedia's Talking Tokens podcast. "And when you build the technology, they haven't thought through how others are going to react."

While companies have bought the hype and narratives around stablecoins and institutional adoption, Soohoo holds that stablecoins are more a distribution play thanks to MoneyGram’s existing network and infrastructure, which spans 60 million customers across 200 countries. The company is already on track to process over a billion dollars in stablecoin transactions on its back-end treasury and settlement operations this year, Soohoo said. 

What separates MoneyGram's stablecoin bet from most others in the market is that it doesn't need to manufacture adoption since its core customers are largely underbanked populations sending money across borders. 

Soohoo says MoneyGram has a similar opportunity to Tether, which also leveraged its mandate of focusing on emerging markets to grow its stablecoin to the top of the charts. For example, in parts of Latin America, MoneyGram users are actively converting local fiat currencies into US dollars to hedge against currency instability. 

That said, Soohoo is clear about who MGUSD is for right now: someone sending money home, paying tuition abroad, or covering a family member's bills in another currency.

"MoneyGram wants to be the bridge that ties the physical with the digital," he said.

MoneyGram’s also betting that its brick-and-mortar store footprint will help it reach more people and give them an easy way to convert cash into stablecoins. Soohoo views the physical locations as “a big part of our advantage."

Soohoo said the goal with MGUSD is to abstract away the complexity of blockchains entirely, with no crypto terminology and no technical friction. 

"I think the winners of this category will be those who put it behind, and consumers barely notice it's there," he said, echoing a line from the product's launch announcement about blockchain infrastructure being "invisible by design."

"Our goal is that we want everyone to have equal access to financial tools that can improve their life," Soohoo added. "And stablecoin provides a really good promise there."

Check out the next section for more details and the full episode.

For today’s episode, I interviewed MoneyGram CEO Anthony Soohoo to talk about MGUSD, the company's new dollar-backed stablecoin built on Stellar with help from Bridge, Fireblocks, and M0.

Anthony explores why launching MoneyGram decided to have its own stablecoin and breaks down how its 60 million active customers and nearly 500,000 retail locations across 200 countries play a role in it. We also discuss why the real winners in this space might be the ones who make stablecoins disappear into the background entirely and how the asset can have a dual role in finance.

TIMESTAMPS

00:00 Introduction to MGUSD and MoneyGram's Vision

03:04 The Complexity of Cross-Border Payments

06:31 Leveraging Existing Infrastructure for Adoption

10:15 The Role of Cash in a Digital Future

12:35 Stablecoins as a Preferred Payment Method

14:09 Self-Custody and User Education

18:22 The Future of Stablecoins and Consumer Adoption

21:33 Navigating Regional Differences in Adoption

24:07 Stablecoins vs. Traditional Banking

25:52 Choosing the Right Partners for MGUSD

28:40 The Dual Role of Stablecoins in Finance

31:21 Lessons from the Crypto Industry

34:51 Advice for Success in the Financial Space

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