In an increasingly globalized world, the demand for efficient, secure, and transparent cross-border payments is at an all-time high. With their cumbersome processes and opaque operations, traditional banking systems are indeed struggling to keep pace with the demands of a rapidly evolving digital economy. This is where blockchain technology steps in, offering a transformative solution that promises to revolutionize the payment infrastructure. Arf has announced a strategic partnership with Huma to bring cross-border receivables on-chain, leveraging the power of blockchain technology to streamline and secure international financial operations.
World’s First Ever Fully Transparent On-Chain Liquidity Solution
Arf, an innovative global liquidity and settlement platform, and Huma Finance, a trailblazer in constructing infrastructure for tangible-world lending, have unveiled a groundbreaking partnership. This collaboration aims to launch the world’s inaugural, fully transparent on-chain liquidity solution for cross-border payments. This strategic alliance is a direct response to the prevailing liquidity obstacles in the industry, primarily stemming from a lack of transparency.
In the current financial landscape, institutions necessitate liquidity to facilitate same-day cross-border settlements. However, their borrowing capacity is restricted by the cash collateral they can offer. Consequently, a staggering $4 trillion is presently trapped in pre-funded accounts. This represents a colossal, albeit concealed, expense for the global payments industry at large.
In a bid to eliminate the expensive pre-funding requirement and mitigate the delays and counter-party risks, Arf has devised a unique solution. The platform provides short-term USDC-based working capital loans, ranging from 1-5 days, to licensed financial institutions. This empowers them to settle cross-border payments promptly in USDC.
Arf’s solution is designed to streamline the settlement of cross-border transactions in a cost-effective way, thereby making these services considerably more accessible and expedient for the average individual.
Arf Co-founder and CEO Ali Erhat Nalbant said, “We are committed to making liquidity more accessible, bringing day-to-day transparency into cross-border payments by utilizing the right digital assets. We’re excited to partner with Huma to have receivable-backed lending on-chain, which will enhance our transparency capabilities to an unprecedented level.”
Financial Institutions To Receive Enhanced Liquidity And Expansion Capabilities
With this cutting-edge partnership, financial institutions are given the tools to expand their scope and increase their transaction capacity, all without the necessity for refunding or additional working capital. Arf utilizes a distinctive blend of traditional and unconventional data, crafting a proprietary credit engine and an in-house credit score.
This sophisticated technique enables the optimization of risk-adjusted pricing, providing Arf’s clients with an enhanced and tailored financial experience.
In a pioneering partnership, Arf and Huma Finance have come together to create the world’s first on-chain credit pool tailored for cross-border payments. This venture seeks to enhance transparency and accountability in the sector. As a key component of this collaboration, Arf utilizes the Huma Protocol to tokenize cross-border payment orders, ensuring privacy is maintained, and uses these tokens as collateral for loans from the lending pools.
This alliance integrates all facets of the lending cycle – from loans and repayments to receivables – into the blockchain, thereby establishing a completely traceable borrowing history. Every transaction, including delayed repayments and even instances of default, will be recorded on-chain, guaranteeing comprehensive and real-time transparency while maintaining privacy.
As a result, lenders can accurately assess risks and cultivate a secure working capital environment. At the same time, financial institutions can extend their services and meet the escalating global demand through improved access to liquidity.
Huma Finance Co-founder Erbil Karaman commented, “Our partnership with Arf embodies our vision of creating a more equitable financial ecosystem. We’re not only enhancing the liquidity access and achieving an unprecedented level of transparency; we are also making the remittances systemically cheaper and faster. We’re excited to work with Arf to drive the evolution of global finance forward.”
