MoneyGram will let people in the U.S. withdraw their cryptocurrency holdings in cash, marking another step from mainstream financial institutions toward acceptance of nascent digital currencies.
The money transfer firm said Wednesday it had teamed up with bitcoin exchange and ATM operator Coinme on the feature. In the coming weeks, new and existing Coinme users will be able to buy crypto with cash or withdraw it from thousands of MoneyGram’s brick-and-mortar locations in the U.S.
The companies plan to expand the offering internationally in the second half of 2021.
“This innovative partnership opens our business to an entirely new customer segment as we are the first to pioneer a crypto-to-cash model by building a bridge with Coinme to connect bitcoin to local fiat currency,” Alex Holmes, MoneyGram’s chairman and CEO, said in a statement.
Financial services firms have been increasingly making moves in the crypto space. PayPal now lets U.S. users trade cryptocurrencies and use them to pay at millions of its merchants. Mastercard said it would start supporting select cryptocurrencies on its network this year, while Visa now supports payment settlement in crypto with the U.S. dollar-backed token USD Coin.
Meanwhile, Tesla, Square and MicroStrategy are among the firms that have adopted the unusual strategy of using company funds to purchase bitcoin. Tesla made a $1.5 billion bet on the cryptocurrency earlier this year, and its holdings were worth about $2.5 billion at the end of March.
This growing acceptance from large institutions of crypto comes amid a wild rally in bitcoin, ether and other digital currencies this year. Bitcoin, the world’s largest cryptocurrency is up over 90% so far this year — though it’s down around 15% from an all-time high above $64,000 set in April — while the second-biggest coin, ether, has risen over 470%.
There has been growing concern of a potential speculative bubble in the crypto market, however. Dogecoin, a digital currency that started as a joke in 2013, is up a whopping 10,000% year-to-date.
MoneyGram and Western Union are two of the most popular wiring services in the U.S.
Western Union hasn’t yet made any public announcements on whether it may support crypto. MoneyGram entered a partnership with blockchain start-up Ripple in 2018 to pilot the cryptocurrency XRP in cross-border payments. However, the two firms put their tie-up on hold after the U.S. Securities and Exchange Commission charged Ripple with conducting a $1.3 billion illegal securities offering. Ripple bought a $30 million stake in MoneyGram in 2019.