Blockworks

MoneyGram has launched a new mobile application in Colombia that uses USD-pegged stablecoins to modernize cross-border remittances. According to an <a href="https://www.prnewswire.com/news-releases/moneygram-reinvents-cross-border-finance-with-next-generation-app-302559343.html">announcement</a> on Wednesday, the app allows customers to receive money instantly into a US dollar balance backed by Circle’s USDC stablecoin, which can be stored, spent, or cashed out through MoneyGram’s global retail network. The rollout is designed to address the volatility of local currencies, particularly the Colombian peso.



Built on the Stellar blockchain and supported by wallet infrastructure provider Crossmint, the app marks MoneyGram’s most significant move yet to integrate stablecoins into consumer-facing services.



Colombia was selected as the first market due to its heavy reliance on inbound remittances—families in the country receive more than 22 times the amount they send abroad, according to Statista. The announcement said future expansions will target other remittance-heavy markets.



MoneyGram, which has nearly 500,000 retail locations globally, has experimented with blockchain rails since partnering with the Stellar Development Foundation in 2021. It has since built cash on and off ramps for stablecoins, developed APIs for crypto integration, and incorporated stablecoins into its internal settlement processes.



“This launch is the first step toward a world where every person, everywhere, has access to dollar stablecoins,” CEO Anthony Soohoo stated.



The company emphasized compliance, citing decades of regulatory experience, though stablecoin oversight remains fluid. The US Congress passed the GENIUS Act earlier this year, establishing a framework for stablecoin regulation, which MoneyGram has pointed to as providing clearer guardrails.



This is a developing story.



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This article was generated with the assistance of AI and reviewed by editor&nbsp;<a href="mailto:jeffrey@blockworks.co" target="_blank" rel="noreferrer noopener">Jeffrey Albus</a>&nbsp;before publication.



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dApps

MoneyGram launches stablecoin-powered app in Colombia

Ben Strack

A liquidity management network for wholesale payments and tokenized real-world assets took a step forward this week as the use of blockchain tech continues to reverberate around the traditional finance space.&nbsp;&nbsp;



Financial firms Lloyds Banking Group, Banco Santander and UBS took part in the new payment system, launched by blockchain payments startup Fnality.&nbsp;



Via the Sterling Fnality Payment System, the live payments took place in a Fnality-held omnibus account within the Bank of England’s real-time gross settlement service (RTGS), Fnality said in a Thursday news release.



The UK central bank <a href="https://www.bankofengland.co.uk/news/2021/april/boe-publishes-policy-for-omnibus-accounts-in-rtgs">said</a> in April 2021 that it would allow RTGS to interface with more payment systems, such as ones that use distributed ledger technology.



Read more: <a href="https://blockworks.co/news/real-world-assets-tradfi-defi-tokenization">TradFi, DeFi convergence continues through tokenizing real-world assets</a>



The latest payments point to a future utilizing new digital models to allow transactions “in both wholesale financial markets and emerging tokenized asset markets,” the company added.



The launch comes after the Sterling Fnality Payment System was <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1100989/220830_Fnality_Designation_Order.pdf">recognized</a> by HM Treasury as a regulated payment system in August 2022, bringing it into the remit of the Bank of England and the UK’s Payment Systems Regulator.&nbsp;



“As we step into 2024, our focus sharpens on scaling up operations within a managed and approved framework as set out by the Bank of England, and steadily progressing towards unlocking new market use cases,” Fnality UK CEO Angus Fletcher said in a statement.&nbsp;



<a href="https://blockworks.co/news/fnality-funding-round-goldman">Fnality raised $95 million last month</a> from Goldman Sachs, BNP Paribas and others. The startup creates tokenized versions of major currencies — including US dollars, euros, British pounds, Canadian dollars and Japanese yen — that are collateralized by cash held at central banks. &nbsp;



These payments are the latest example of blockchain technology becoming more prevalent in the traditional finance realm.&nbsp;



JPMorgan has for years been exploring tokenization and blockchain initiatives, <a href="https://blockworks.co/news/blackrock-barclays-jpmorgan-chase-dapp-tcn">facilitating a collateral transaction between BlackRock and Barclays</a> in October via a decentralized application. The company also recently <a href="https://blockworks.co/news/jpmorgan-blockchain-payments">unveiled a programmable payments offering</a> for blockchain-based accounts on the permissioned JPM Coin System.



Most big financial institutions are exploring use cases of tokenization, according to Samir Kerbage, chief investment officer at Brazil-based asset manager Hashdex — citing conversations with such companies.



“We’re seeing more and more of those use cases coming to market, especially when we’re talking about tokenizing real-world assets and bringing those assets to the blockchain,” Kerbage said during a Wednesday webinar.



21.co research analyst Carlos Gonzalez Campo said during a separate Wednesday webinar that 2023 represented an “experimental stage” for tokenization.



“Moving on into 2024 I think what you can expect is more…moving things into production and actually scaling it,” he added. “I think you will have some challenges to achieve that, namely cross-chain communication.&nbsp;



The Bank of England is set to assess the Sterling Fnality Payment System’s initial operations “against regulatory expectations as we scale up to commercial operations,” Fnality said.



A central bank spokesperson did not immediately return a request for comment.&nbsp;



The House of Commons Treasury Committee advised the Bank of England and HM Treasury <a href="https://blockworks.co/news/uk-undecided-on-cbdcs">to thoughtfully consider the introduction of a central bank digital currency</a> (CBDC) in the UK.



Read more: <a href="https://blockworks.co/news/bis-cbdc-project-mariana-concludes">Wholesale CBDCs and automatic market makers could be the perfect pair, BIS finds</a>



A digital pound specifically raises concerns about financial stability, the House of Commons Treasury Committee said at the time. 



The New York Federal Reserve said in July — following a three months-long experiment with major banks — that <a href="https://blockworks.co/news/ny-fed-centralized-blockchain-payments">centralized blockchain payments could help address pain points</a> in the settlement process.



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Bank of England

Even the Bank of England is part of a shift to blockchain use cases

JPMorgan is giving institutional clients more control over payments via JPM Coin — marking the company’s latest blockchain-related milestone.&nbsp;



Its new programmable payments offering is a feature for blockchain-based accounts on the JPM Coin System, a permissioned payment rail and deposit account ledger letting clients transfer dollars within the system.&nbsp;



Programmability lets clients place rules for funding a bank account, for example — or set parameters for executing payments based on margin calls, asset delivery or meeting contract requirements.



“Blockchain technology is the ideal infrastructure to which programmable payments can be applied as it enables rules and bank accounts to be integrated in a native manner, enabling cases including dynamic direct debits and multi-party escrow accounts,” a spokesperson told Blockworks in an email.&nbsp;



JPMorgan’s <a href="https://www.jpmorgan.com/onyx/onyx-digital-assets.htm">Onyx Digital Assets</a> network — launched in 2020 — enables the tokenization of traditional assets, such as US Treasurys and money-market products.&nbsp;



The company tested programmable payments with German automation company Siemens in December 2021, calling it “a move that will forever redefine the role of corporate treasuries,” in a blog <a href="https://www.jpmorgan.com/insights/payments/wallets/programmable-payments-automation-becomes-reality">post</a> at the time.



Siemens made its first payment with the programmable capability on Nov. 6.&nbsp;



“Advantages and features from the crypto world are now available for fiat currencies by JP Morgan’s provision of 24 [hours] by 7 [days] blockchain-based bank accounts, combined with programmability,” Siemens’ group treasurer Peter Rathgeb said in a Friday statement.&nbsp;



Naveen Mallela, head of coin systems at Onyx, noted in a LinkedIn <a href="https://www.linkedin.com/feed/update/urn:li:activity:7128680428038750208/">post</a> that there is now “general availability” for the new offering, adding that programmability “has always been the holy grail” in the JPM Coin roadmap.



“We believe that this capability will enable not only a real-time and a programmable treasury but also newer digital business models,” Mallela wrote.



JPMorgan has been busy on the blockchain front. The financial titan <a href="https://blockworks.co/news/jpmorgan-trade-on-public-blockchain-monumental-step-for-defi">used the Polygon blockchain to trade tokenized cash deposits</a> in November 2022.&nbsp;



More recently, asset manager BlackRock last month <a href="https://blockworks.co/news/blackrock-barclays-jpmorgan-chase-dapp-tcn">used JPMorgan’s Tokenized Collateral Network</a> to tokenize shares in one of its money market funds. It then sent those interests to Barclays as collateral for an over-the-counter (OTC) derivatives trade between the firms.



Read more: <a href="https://blockworks.co/news/real-world-assets-tradfi-defi-tokenization">TradFi, DeFi convergence continues through tokenizing real-world assets</a>



BlackRock CEO Larry Fink said last year the tokenization of securities is <a href="https://blockworks.co/news/blackrock-ceo-still-in-crypto-for-the-tech-despite-ftx-scandal">“the next generation for markets.”</a>



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JPMorgan

JPMorgan adds ‘holy grail’ payments feature as part of blockchain push

Shalini Nagarajan

David Marcus, who previously led Meta&#8217;s Novi and Diem ventures, recently appeared on CNBC to talk about Lightspark, his new bitcoin-centric infrastructure venture.



“What we&#8217;re trying to do is turn Bitcoin into a real global payment network,” he <a href="https://www.cnbc.com/video/2023/09/11/were-trying-to-turn-bitcoin-into-a-real-global-payment-network-says-lightspark-ceo.html">told</a> CNBC’s Squawk Box on Sept. 11.&nbsp;



Lightspark publicly debuted in April, backed by the likes of a16z crypto, Paradigm and others, with the goal of building on Bitcoin’s Lightning network.&nbsp;



During the CNBC interview, Marcus contended that “we’re still in the fax era of global payments.” He highlighted how there is currently no global internet protocol to efficiently transfer money across international borders.



To send money, you often need to request a bank account number, deal with varying formats and face high international wire transfer fees. This cumbersome process involves substantial sums, with trillions of dollars flowing through networks like SWIFT, he said.



Marcus doesn’t expect bitcoin itself to be used as a currency for everyday purchases. Instead, he said using a small part of a bitcoin within the Lightning Network is like sending a specialized data packet on the internet specifically for transferring value between people.



“So, you can exchange at the edges of the network and send dollars to someone who will receive Japanese yen on the other side, or send dollars to someone who will receive euros on the other side,” he said.



“And the actual net settlement layer that is used is <a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>, Lightning and it settles in real time, cash final and at a very, very low cost.”



Marcus has earlier <a href="https://blockworks.co/news/paypal-meta-david-marcus-crypto">stated</a> that the crypto industry has many projects without immediate practical applications. He encouraged developers to evaluate whether their solutions genuinely tackle real-world problems.



In addition to his work at Meta, Marcus founded a mobile payments startup called Zong that was later acquired by PayPal.&nbsp;



During his time at Facebook, Marcus was instrumental in the creation of Diem (formerly Libra), a project conceived by founder Mark Zuckerberg. 



Diem aimed to democratize finance by enabling global cryptocurrency transactions within Facebook&#8217;s apps like Messenger and WhatsApp, convertible to local currencies. But the project drew swift controversy, and following numerous congressional hearings and significant departures of key personnel, Diem ultimately <a href="https://blockworks.co/news/facebook-led-crypto-project-diem-to-be-sold-off-for-200m-report">ceased operations</a>.



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Bitcoin

Former Meta crypto exec plots course for Bitcoin’s transformation to global payment network

James Cirrone

Seven crypto startups raised a little over $46 million this week, with Web3 payment platforms and an interoperability protocol among the fray.&nbsp;



Bit2Me, a Spanish crypto exchange, pulled in the most capital this week — $15 million — in a bid to grow its home business as well as expand into Latin America, an area of the world <a href="https://blockworks.co/news/latin-america-growing-crypto-hotbed">venture capital firms are beginning to see as a crypto hotbed</a>.



The raise was carried out by Investcorp with participation from Telefónica Ventures, Stratminds VC, Cardano and the YGG fund.&nbsp;



Leif Ferreira, Bit2Me co-founder and CEO, said in a statement that his company has been working for over two years to improve the quality of the product while also maintaining regulatory compliance.



“This funding will boost our acquisition of new customers specially thanks to Investcorp, an international partner with significant financial muscle, and to Telefónica, who will give us more channels in Latin America.”



This news of fresh cash for Bit2Me comes a week after crypto exchanges <a href="https://blockworks.co/news/sec-sues-coinbase">Coinbase</a> and <a href="https://blockworks.co/news/binance-changpeng-zhao-face-sec-charges">Binance</a> fell under the crosshairs of the SEC for <a href="https://blockworks.co/news/coinbase-binance-suits-different">allegedly selling unregistered securities</a>. Bit2Me’s services aren’t available in the United States, according to its <a href="https://bit2me.com/global">website</a>.



<h2 class="wp-block-heading">A focus on crypto payments</h2>



Two startups focused on streamlining crypto payments raised money this week.



First, Poko secured $4.5 million from lead investors Y Combinator, NAZCA, and Global Founders Capital. Its two main products right now are a direct checkout tool for smart contracts and an onramp aggregator. 



Poko told news outlet Tech in Asia that it has <a href="https://www.techinasia.com/poko-raises-4-5m-to-reduce-web3-payments-friction">over 11 million active wallets</a> using its payment rails across Latin America, India, and Southeast Asia.



A second crypto payment processor, BoomFi, raised $3.8 million in a round led by White Star Capital with other investors including Kraken Ventures, Layer Zero, and people affiliated with MoonPay and Stripe.



BoomFi allows businesses to accept a wide range of crypto tokens as payment. And the startup has a lofty goal.&nbsp;



By 2028, it wants to enable a million businesses and merchants to accept digital currencies, according to a <a href="https://www.boomfi.xyz/post/boomfi-raises-3-8m-seed-to-lead-the-charge-in-crypto-payments-for-the-utility-era">statement</a>.



<h2 class="wp-block-heading">Other notable fundraises</h2>



<ul class="wp-block-list">
<li>Connext, a modular interoperability protocol for chains and layer 2s, <a href="https://twitter.com/ConnextNetwork/status/1669007377314762752">took in</a> $7.5 million at a $250m valuation.</li>



<li>ResearchHub, a tokenized social network focused on scientific discovery, <a href="https://www.researchhub.com/post/979/researchhub-raises-5m-to-help-scientists-monetize-their-research">raised</a> $5 million. The platform allows anyone to earn crypto if they contribute new information to the science. It was co-founded by Coinbase CEO Brian Armstrong.</li>



<li>Data and analytics platform Mnemonic locked down a $6 million seed extension. Salesforce was the head investor but joined up with Polygon Ventures, Orange DAO and others.</li>



<li>Collectibles.com <a href="https://www.prnewswire.com/news-releases/collectiblescom-raises-5m-seed-round-to-launch-the-worlds-first-web3-collector-community-and-marketplace-301849175.html">received</a> $5 million from Blockchange Ventures and Peter Thiel to integrate blockchain tech into the collectibles market.</li>
</ul>



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crypto exchanges

Crypto funding: A $46M week with a crypto exchange snagging biggest haul

Casey Wagner

<div id="highlights-block_62966fa71b63d" class="highlights">
 <ul>
 <li>More digitized payment models are going to continue to emerge, JPMorgan analysts estimate</li>
 <li>“Digital transformation is not a sprint, it’s a marathon, but it also has no finish line,” a JPMorgan Jeremy Balkin said</li>
 </ul>
 
</div>



JPMorgan Chase is amping up its investments in payment processors, and — according to the global bank’s head of innovation and corporate development — everyone else in the financial services industry should follow suit.&nbsp;



“Continue to focus on payments, because I think that&#8217;s a space that&#8217;s borderless,” Jeremy Balkin said at the Mediterranean Business Summit in New York Tuesday.



Earlier this year, JPMorgan moved to acquire around 49% of Athens-based payments services provider Viva Wallet. In 2021, the bank made nearly 20 total investments in the fintech space, including acquiring a 75% stake in <a href="https://www.jpmorgan.com/news/jpmorgan-to-take-majority-ownership-of-volkswagen-payments-business" target="_blank" rel="noreferrer noopener">Volkswagen Payments</a>, a platform designed for the automotive industry.&nbsp;



“I think payments…[are] the natural tip of the spear for financial services as it relates to intersecting with the new world of fintech,” Balkin said. “I think it&#8217;s the ideal space to collaborate and to build your business models to move money faster, safely, more efficiently.”&nbsp;



Banks with the ability to custody the digital assets of clients and be competitive in the landscape are going to be the most successful in coming years, he added. 



JPMorgan analysts estimate tech modernization efforts will top $2.8 billion in 2022, a billion dollar increase from 2019. This increase in technology infrastructure will lead to more than $5 trillion in payments, the bank said in <a href="https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/events/2022/jpmc-Investor-Day-2022/2022-consumer-community-banking-investor-day.pdf" target="_blank" rel="noreferrer noopener">materials</a> released as part of its 2022 investor day.



“Winning in payments is our strategic imperative,” analysts wrote.&nbsp;



Payments service providers such as PayPal and Block have “done an incredible job penetrating the consumer market,” Balkin said, adding, “the question is what happens in this new environment of interest rates, the cost of capital is not free.”&nbsp;



Balkin expects ample consolidation in payments to come, and the biggest companies are likely going to continue to thrive — akin to Amazon&#8217;s rise during the dot-com bubble. 



Digital banking is only going to continue ramping up, Balkin said, meaning the focus on virtual is more important than ever. In 2021, more than 65% of JPMorgan accounts were opened online, analysts said.&nbsp;



“Digital transformation is not a sprint, it’s a marathon, but it also has no finish line, it&#8217;s perpetual, it has to continue,” Balkin said.



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