Ripple Labs Inc. has committed up to $50 million in investment capital in return for equity into MoneyGram International Inc. as part of an expansion of the partnership between the two companies announced in January 2018.

The deal, announced today, sees Ripple investing $30 million upfront into MoneyGram for an 8% stake in the company at $4.10 per share with the option of investing up to $20 million more at the same share price in the next two years. The deal marks one of the first investments by a cryptocurrency company into a well-known public company.

It also comes shortly before Facebook Inc. is set to announce a new cryptocurrency as early as Tuesday with support from Mastercard Inc., Visa Inc., PayPal Holdings Inc. Uber Technologies Inc. and a dozen other companies, each of which is said to have invested at least $10 million into the project as part of the $1 billion Facebook was reported to be raising in May.

The price per share paid by Ripple is surprisingly high. MoneyGram’s share price closed regular trading Monday on the Nasdaq at $1.45 per share. Even in after-hours trading following the announcement of the Ripple deal, the company’s shares rose to only $3.68. Although a 154% price surge is impressive, it’s still below what Ripple paid for MoneyGram stock.

Insane prices aside, the deal all comes down to Ripple wanting to expand exposure for its XRP cryptocurrency and blockchain. Under the deal, MoneyGram, which specializes in cross-border transactions, will use Ripple XRP as part of its everyday operations.

MoneyGram will be using Ripple’s xRapid transaction product, a solution for on-demand liquidity that’s claimed to reduce reliance on prefunding by enabling money to be sent from one currency and instantly settled in the destination currency using Ripple XRP as the bridge among different currencies.

“As the payments industry evolves and matures, it’s imperative that we continue to improve our platform and provide the most effective solution to get funds from point A to point B,” Alex Holmes, MoneyGram’s chairman and chief executive officer, said in a statement. “Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management.”

For MoneyGram, xRapid should reduce costs per cross-border transfers. According to ModernConsensus, Ripple’s xRapid can complete FX transactions in two to three seconds for a fraction of a penny. By comparison, a foreign exchange transaction through the Society for Worldwide Interbank Financial Telecommunication’s network can often take several days.

The deal was well-received not only by Nasdaq traders but cryptocurrency investors as well. Ripple XRP was trading at 45 cents as of 9:30 p.m. EDT, up 5% over the last 24 hours. Bitcoin rose less than 2% over the same time period.

Image: Ripple