Ledgermatic Aims To Challenge Banks’ Crossborder Payment Stranglehold
Digital asset treasury specialist Ledgermatic announces its White Paper, including plans to break the virtual cartel operated by big banks on corporate payment systems, using a low-cost, cross border payment corridor, reducing banking touchpoints by up to 60%, through the use of distributed ledger and digital asset technology.
This could mean that exporters in developing economies with unstable currencies are able to secure investment and procure raw materials without seeing the size of their international (eg USD denominated) debt reach unsustainable levels when their currency plummets , as recently seen with the Turkish Lira.
Ledgermatic also plans to enable companies to emulate Tesla and hold Bitcoin and other cryptocurrencies on their balance sheet, but in a compliant way.
Corporate treasury specialist Ledgermatic launches its White Paper, offering a first look at use cases, solutions and technologies it intends to deploy ahead of its product release later this year.
It will aid organizations to future-proof their corporate treasury services, allowing them to hold and transact digital assets like Bitcoin in a compliant way. As a first use case, Ledgermatic intends to offer a digital asset competitor to in-house banking payment systems and structures favoured by large banks to allow corporates to reduce their regional and local banking infrastructure. To further this concept, Ledgermatic promises a low-cost, cross border payment corridor and reduced banking touchpoints by up to 60%.
Recognising the continued inefficiencies in global commerce, in 2020 the G20 Finance Ministers and Central Bank Governors (FMCBG) group tasked the Financial Stability Board (FSB) to launch a review to analyse and enhance crossborder payments. Citing friction in speed, cost, transparency, data standards and interoperability, the review seeks ways to improve how global commerce is conducted.
Ledgermatic's whitepaper proposes ways to tackle these frictions in a B2B setting. Using a P2P payment channel with the choice of an internally minted or externally sourced stablecoin, Ledgermatic’s solution offers cost savings and lower credit risk by virtue of its near instant settlement times. By combining P2P technology with FX settlement capabilities and strong compliance, Ledgermatic offers a hybrid model for enterprise that balances speed, cost and safety. Ledgermatic is also committed to aligning with emerging global standards like the ISO20022 messaging format and Legal Entity Identifier (LEI)’s for business.
For organisations around the world subjected to sudden currency depreciation, FX volatility and expensive banking infrastructure, Ledgermatic offers alternative asset classes and infrastructure to transact with counterparties and finance their business. It will additionally offer its corporate clients a way to deploy their own corporate-backed Treasury Token (LT2), an internal stablecoin backed by any corporate asset, verified by Ledgermatic. The token will offer multiple use cases for onchain global commerce, including digital asset credit, programmable and dynamic AR/AP processes verified in real-time.
Luke Sully, CEO at Ledgermatic said: "If you're an international supplier, perhaps a Turkish manufacturer and exporters of steel pipes, you might hold a substantial and increasing amount of US dollar debt at a time when your local currency is depreciating. That impacts your competitiveness. To find more cost effective ways to keep you connected with your international counterparts and insulate yourself from fiat exposure, Ledgermatic is there.”
Isaac Fain, CTO and Co-Founder of Ledgermatic, commented: “If we can help reduce working capital cycles, digital asset infrastructure will provide real economic benefits and deliver on its fundamental promise. The range of exciting use cases adds up to a huge efficiency win for companies and will give them the confidence to access digital asset infrastructure for an ever growing range of treasury solutions, thus enhancing their ability to grow their own business more efficiently.”
The whitepaper is available here