Tradeshift partners MakerDAO to Speed up Small Business Payments
Tokenization of invoices
MakerDAO which is a Stablecoin startup announced to 6th July that it will be launching a testing program in partnership with Supply chain company Tradeshift which will be aimed at speeding up payment for small and medium-sized businesses. In its statement, MakerDAO said that its stablecoin is currently being tested with Tradeshift Cash Solution in order to tokenize all unpaid invoices of small businesses. The idea is to sell the coin at a discount to cryptocurrency investors to enable small businesses to receive their payments upfront.
MakerDAO’s DAI token was launched in December 2017 and is one of the growing stablecoins. This token was designed to adjust its supply because the market is shifting so as to maintain a price attached to the United States Dollar.
At the moment Tradeshift Cash solution is allowing small businesses to sell their invoices as an asset type to interested traditional investors at a subsidized price. Investors at the end receive a margin when the outstanding payment is eventually done.
According to Rune Christensen, the founder of MakerDAO, this pilot program was made to bring this type of assets to more digital currency investors. The founder went on to explain that during the test time of this project small businesses using Tradeshift will have the option to convert pending invoices into a DAI token at a subsidized price which can then be bought by cryptocurrency investors. The fund, at last, will be changed into fiat and then credited to the small business account.
Since stablecoin’s price will remain constant in most cases the hope is to have this pilot allow more small businesses to have an option of selling their pending invoices and receive payments quicker. According to Gert Sylvester, the founder of Tradeshift:
“Trade receivables market has high markets, leaving no room for volatile cryptocurrencies as instruments of settlement.”
More to that MakerDAO added that it was also planning to launch an open platform with Tradeshift which will allow small businesses to interact with investors so as to further boost market liquidity. Christensen added that:
“this transaction will be cheap because there will be a lot of money available for the businesses and more to that the small businesses will also be many for investors to choose from.”
This pilot has come barely a month after an announcement from Tradeshift that it was planning to expand its business into blockchain after its 250 million dollar funding round which was led by Goldman Sachs.