CR Square Finance White Paper
  • Disclaimer
  • Overview
    • Vision
    • Mission
  • CR Square Guardian
    • Perils of Investments in Private/ Pre Sales of Tokenized Blockchain Projects
    • Limitations of Funding Mechanism in web3.0 community. (Investors Perspective)
    • Potential Solutions to safeguard investors interests
    • Guardian Process Flow & Features
  • CR Square DEFI Books
    • Triple Entry System of Accounting using DLT
    • Need for Financial Transparency in the Web3 Community
    • Invoice Finance
    • Invoice Finance for Blockchain Projects
    • DEFI Books Process Flow
  • Use Cases of CR Square Finance
  • Roadmap
  • Tokenomics
    • Token Utility
  • DAO Governance
  • Security
  • Team
    • Advisors
  • Resources
  • Contact
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  1. CR Square DEFI Books

Invoice Finance for Blockchain Projects

Invoice Financing is a typical financial business where it is governed by the legacy banking systems. The banks typically accept deposits from public at lower interest rates and lend it to businesses for a considerably higher rate. The balance is profits for the banker for the risk it is taking.

With the advent of decentralised finance on the top the blockchain framework where the entire banking process is run in a decentralised and autonomous manner based on the smart contracts, the benefits of risk taking are reaching to every investor directly without any pilferage.

For the lender(one who is financing the invoice) the benefits of decentralization and blockchain adoption are as follows:

(i) an immutable and time stamped record of the existence of every invoice emitted by a borrower.

(ii) an immutable and time stamped record of the debtor's confirmation, and

(iii) the confirmation and verification of the invoice (against which a lender would fund)

(iv) Automation through smart contracts, which ensures the lenders funds are secure in the event of failure of payment of invoice by the client/customer.

Hence, the overall invoice financing process will be enhanced. Indeed, the trust and security mechanisms of the blockchain allow for the elimination of on-site audits of receivables and debtors, of receivables' notification and debtors' verification, and of month-end reconciliation processes.

Moreover, the adoption of blockchain will also allow for a fast and cheaper value transfer, in particular for cross-border payments.

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Last updated 3 years ago