NEW YORK (AP) — MoneyGram’s shares more than doubled Tuesday after the money transfer company announced a partnership with the cryptocurrency company Ripple.
The companies said late Monday that the two-year deal will allow MoneyGram to use Ripple’s blockchain service for cheaper cross-border payments. Ripple, based in San Francisco, invested $30 million in MoneyGram as part of the deal, with an option to purchase up to an additional $20 million in shares at $4.10 each.
Shares in Dallas-based MoneyGram had their largest one-day percentage gain ever Tuesday, though the value of the company’s stock has never recovered from the global economic crisis 10 years ago when it was trading close to $300. The company lost about $1.5 billion investing in mortgage-backed securities.
MoneyGram’s stock surged $2.43, or 167.6%, to close Tuesday at $3.88.
The company’s entry into the cryptocurrency field offset some of the damage of Facebook’s announcement Tuesday that it’s creating its own digital currency called Libra. That could threaten companies that charge fees to send money internationally.
Rival Western Union’s stock slipped 2.4%.
Facebook, currently under federal investigation over its privacy practices and facing an antitrust probe in Congress, says it wouldn’t run Libra directly. Instead, the company and its partners are forming a nonprofit headquartered in Geneva, which will be regulated by Swiss financial authorities.
With 2 billion Facebook users worldwide, the social media giant has a built-in customer base that could help it cut into the booming digital payment market. Facebook said Libra would allow users to send money across borders without incurring significant fees charged by international money-transfer services.
Libra is scheduled to launch sometime in the next six to 12 months.