Stellar adds MoneyGram as Tier 1 validator, boosting network security

MoneyGram International, Figure Markets and blockchain security firm Range will operate as Tier 1 validators on the Stellar network, upgrading from users to infrastructure operators in a move that strengthens the blockchain's institutional credibility.

"Becoming a Stellar validator deepens our commitment to the ecosystem and reinforces our belief that the future of payments will be built on open, interoperable infrastructure," Luke Tuttle, chief product and technology officer at MoneyGram, said.

The three organizations must each run three geographically distributed full validator nodes with at least 99.9 percent uptime, complete SEP-1 and SEP-20 self-verification, and coordinate with existing Tier 1 operators during network upgrades, according to the Stellar Development Foundation. The new validators are expected to be fully integrated into Stellar's quorum configuration by mid-August.

Stellar operates on a proof-of-agreement model called the Stellar Consensus Protocol, which does not issue token rewards to validators. Organizations bear the cost of running infrastructure in exchange for influence over network consensus and reliability. Broader participation reduces the risk of simultaneous outages disrupting the ledger, the foundation said.

MoneyGram's deepening role

MoneyGram first partnered with Stellar in 2021 to build one of the first large-scale blockchain-powered cash on-ramp and off-ramp networks, which went live in 2022. Stellar now powers MoneyGram Ramps, the company's blockchain infrastructure for cash access, and 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, executive vice president and general manager of MoneyGram Online, said. He stressed that MoneyGram does not want to be sidelined.

Before embracing Stellar, MoneyGram was one of Ripple's highest-profile enterprise partners. Ripple invested $50 million in MoneyGram in 2019 for a partnership centered on its cross-border settlement product using XRP. MoneyGram suspended that relationship in early 2021 after the U.S. Securities and Exchange Commission sued Ripple in December 2020.

Validator diversity and network resilience

Figure Markets brings experience from regulated blockchain-based financial products, including its $YLDS stablecoin on Stellar. Range, a blockchain security firm, monitors more than 200 networks and has helped secure over $30 billion in digital assets, according to the company.

"The organizations stepping up to run Tier 1 validators are not passive participants," Justin Rice, vice president of ecosystem growth at the Stellar Development Foundation, said. "They have a direct stake in the network's long-term security and neutrality."

Jose Fernandez da Ponte, president and chief growth officer at the SDF, said the Stellar network's proof-of-agreement consensus lets any institution run a publicly identifiable validator and choose exactly whom to trust, adding that bringing in MoneyGram, Figure Markets and Range makes the network stronger over the long term.

The addition of three institutional validators across payments, regulated finance and security infrastructure diversifies the set of organizations responsible for Stellar's consensus process, reducing single-point-of-failure risk for the network's growing stablecoin and cross-border payment applications.

This article is for informational purposes only and does not constitute investment advice.