Supply chain FinTech startup Tradeshift is cutting cross-border supplier-buyer transaction fees by tapping the public Ethereum blockchain.
Launched in 2015, the startup is an innovation division of Goldman Sachs and has two million firms on its platform.
Flow tokens – also known as tokenized IOUs – “can do for supply chain management and trade finance what Libra has been attempting to do at a consumer level with wallets and stablecoins,” the Tradeshift press release said.
“We are deliberately going slow and trying not to break things, which is how it should be in finance,” said Monerium Co-founder and CEO Sveinn Valfells. He added that eMoney is the oldest and most proven framework for digital cash in any major jurisdiction, and that Monerium’s eMoney on Ethereum has now been approved for use in Iceland, Denmark, Germany, U.K., Lithuania, France and Sweden.
Gert Sylvest, co-founder of Tradeshift and GM of Tradeshift Frontiers, said of cross-border payments, “We have taken an accepted invoice and tokenized it on Ethereum. On the due day, a smart contract automatically swaps the tokenized invoice for the eMoney that is on-chain.”
In terms of timeline, Sylvest said he could “not set a date for going into production,” but the first quarter of 2020 would be used to “validate interest on the back end” among users of the platform.
Hafsteinn Guðbjartsson, CEO of Nordic Store, said that “crippling costs” added to the lack of transparency when considering payment to international suppliers overseas were among the complaints.
Much of Nordic Store’s inventory comes from abroad, involving multiple currencies routed through its Icelandic bank to the banks of suppliers and manufacturers, a long and opaque process that is also prone to error, said Guðbjartsson.
“We send a lot of money to China, which is pretty opaque. Thailand is probably the most problematic; I guess they have some kind of financial constraints on their currency or something, and we cannot buy Thai baht,” Guðbjartsson noted.