Payments giant MoneyGram has announced that it has joined the Stellar network as a Tier 1 validator.
The news comes five years after the Dallas, Texas-headquartered company first partnered with the organization.
Apart from MoneyGram, borrowing platform Figure Markets and wealth management platform Range will begin operating Tier 1 validators.
The new roster of validators will become activated by mid-August, according to the announcement.
Becoming a validator
Validators are responsible for maintaining the blockchain's integrity by verifying transactions and participating in network consensus.
On Stellar, Tier 1 validators are particularly important. They operate multiple geographically distributed validator nodes and participate in the Stellar Consensus Protocol. Each validator independently selects the trusted participants it relies on to reach agreement on the ledger's state.
Stellar's consensus model does not reward validators with newly issued tokens, which is typical for proof-of-work and proof-of-stake networks. Instead, organizations run validators primarily to improve security and decentralisation.
Tier 1 validators must operate three geographically dispersed full validator nodes and maintain at least 99.9% uptime on top of some other requirements.
MoneyGram's crypto journey
Before embracing Stellar, MoneyGram was one of Ripple's highest-profile enterprise partners. In 2019, Ripple invested $50 million in MoneyGram, and the companies launched a partnership centered on On-Demand Liquidity (ODL), which is Ripple's cross-border settlement product that uses XRP.
The partnership, which was viewed as one of Ripple's biggest commercial wins, came to an abrupt halt after the U.S. Securities and Exchange Commission sued Ripple in December 2020. MoneyGram suspended its use of Ripple's ODL service in early 2021 and pivoted to its rival.
MoneyGram and the Stellar Development Foundation first joined forces back in 2021 to create one of the first large-scale blockchain-powered cash on- and off-ramp networks. The service eventually went live in 2022. Since then, the partnership has broadened beyond remittances.
Today, Stellar powers MoneyGram Ramps, the company's blockchain infrastructure for cash access. It also serves as the exclusive blockchain behind MoneyGram's consumer digital dollar balance feature.
"We have recently decided to become a validator on the Stellar network, and the reason why that's so important to us is that we vividly see the benefits of crypto, the benefits of stables," Josh Gordon-Blake, the executive vice president and general manager of MoneyGram Online, said in a statement. He has stressed that MoneyGram does not want to be sidelined.
Dan Burgin
U.Today Editorial Team
