MoneyGram partnership. How to activate your Stellar account for your first cash in transaction

Modified on Wed, 07 Dec 2022 at 10:53 AM

"Cash in with MoneyGram" option allows LOBSTR users to seamlessly exchange physical cash for digital dollars at MoneyGram locations around the globe.

You can visit a MoneyGram location near you, deposit cash in your local currency and receive Stellar USDC (USD Coin) in a matter of minutes, all without requiring a bank account and with zero fees. 

However, your Stellar account needs to be active to initiate cash in transactions with MoneyGram.


Why active account is required to cash in with MoneyGram?

Per Stellar protocol rules, each Stellar account must maintain a minimum balance of 1 XLM to exist and transact on the network.

In order to receive USDC deposits and hold USDC asset balance, Stellar accounts must also establish a trustline with the corresponding asset issuer (add the asset to the account), which increases the required minimum balance by 0.5 XLM. 

The total minimum account balance enforced by the network rules adds up to 1.5 XLM. 

MoneyGram is not able to send funds to your account unless these conditions are satisfied. 

Learn more about minimum balances on Stellar here.

How LOBSTR helps you initiate your first cash in

If you are new to LOBSTR and your Stellar account is inactive, LOBSTR can help you complete your first cash in via MoneyGram. 

To help you get your account activated, we are using a feature of the Stellar network called 'sponsored reserves'. 

Sponsored reserves allow a Stellar account operated by LOBSTR to cover the minimum balance for the user's Stellar account, effectively transferring these requirements to a separate LOBSTR-owned account.

While this relationship exists, minimum balance requirements that would normally apply to a user's Stellar account temporarily apply to LOBSTR's sponsoring account.


Learn more about sponsored reserves here.

My Stellar account is inactive. How do I initiate my first cash in via MoneyGram? 

You will see that an active account is required if you attempt to cash in with MoneyGram and your Stellar account does not exist yet (inactive).

Click the 'Agree and Continue' button to activate your account and start the cash in process.

Make sure your LOBSTR mobile app is updated to version 9.0.0 or higher if you don't see this option on your end, or start the cash in 

When you click the 'Agree and Continue' button, LOBSTR creates a unique sponsorship transaction that enables your account to start the MoneyGram cash in process. 

This transaction activates your Stellar account on the network, adds USDC trustline required to receive your deposit later, and transfers the minimum balance requirements from your Stellar account to the sponsoring account operated by LOBSTR wallet. 

Your Stellar account stays in your sole control before and after the transaction is applied.


At the same time, LOBSTR also funds your Stellar account with an extra 0.05 XLM, as XLM is required to pay transaction fees on the network. Once you receive your first USDC deposit, use these funds to swap some of your USDC to XLM so you can perform more transactions in the future. 

The sponsorship service is provided by LOBSTR free of charge.  

Each LOBSTR user can only request one Stellar account to be sponsored to start the MoneyGram cash in process. Any subsequent accounts used by the same user will need to be activated by this user manually. 


Once you have enough XLM on your account balance to cover the minimum balance for your Stellar account on your own, LOBSTR will automatically revoke the minimum balance sponsorship provided earlier. 

That means that 1.5 XLM minimum balance will be reserved on your account according to the network rules. 

Do not worry, the funds in your reserved balance are still yours and can be withdrawn at any time.


Removing USDC trustline will free up 0.5 XLM reserved on your balance. You can use the LOBSTR merge tool in case you want to withdraw the last 1 XLM reserved on your balance. 

Learn more about the Merge tool here.

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