tl;dr
MoneyGram launches crypto app in Colombia, enabling USDC transactions via Stellar and Crossmint amid peso decline. The app allows digital storage and transfers, with hybrid access to physical branches. Colombia's remittances exceed domestic transfers, and the app offers potential savings incentives....
MoneyGram’s Crypto App Launches in Colombia: A New Era for Digital Payments Amid Peso Decline
Colombia’s financial landscape is shifting as MoneyGram, the global money transfer giant, rolls out its digital payments app, offering locals a lifeline against the weakening Colombian peso. The service, powered by the Stellar network and leveraging Crossmint for self-custody, allows users to store and transfer USDC, a U.S. dollar-pegged stablecoin, instantly. This move comes as the peso has lost nearly 12% of its value against the dollar since early April, prompting many to seek more stable alternatives for savings and transactions.
For millions of Colombians, cross-border money transfers are a lifeline. MoneyGram highlighted that Colombian families receive 22 times more money sent abroad than they send, underscoring the critical role of international remittances in supporting households. The new app eliminates the need to visit physical MoneyGram locations to collect cash, enabling users to store funds as USDC in the app. When they want to convert to Colombian pesos, they can still visit a branch—a hybrid model that balances digital convenience with traditional access.
The integration also hints at future incentives, with MoneyGram noting potential savings rewards for deposits. The app, available on Apple and Google Play, requires users to join a waitlist for account approval, reflecting the cautious rollout of crypto services in a regulated environment.
Yet, the crypto scene in Colombia remains complex. While MoneyGram’s move signals growing trust in stablecoins, local crypto enthusiasts still favor Tether’s USDT. José Luis Garcia, a member of a Colombian Bitcoin Telegram group, noted that USDT transfers dominate activity, particularly via Binance’s peer-to-peer platform and apps like El Dorado P2P. The Tron network’s USDT supply hit $80 billion in June, driven by its fast, low-cost transactions—a boon for users in developing markets.
However, Bitcoin’s presence is waning. BTCMaps data reveals a steep decline in Bitcoin-accepting merchants, with only 62 active spots as of May 2024, down from 106 in September 2023. Notable closures, like Medellín’s MIND Crypto Caffe, reflect a broader trend of businesses pivoting away from Bitcoin amid volatility and regulatory uncertainty.
MoneyGram’s entry into Colombia’s digital payments market marks a pivotal moment. By combining traditional infrastructure with blockchain technology, the company is addressing a critical need: stability in a time of economic uncertainty. As Colombians embrace USDC and other stablecoins, the nation’s financial ecosystem may be quietly evolving—toward a future where digital assets coexist with, and perhaps even outpace, traditional currencies.
What do you think? Will stablecoins like USDC become the new standard for cross-border transactions, or will Bitcoin’s volatility continue to hinder its adoption?