MakerDAO Pilots Stablecoin With TradeShift to Speed Up Payments

MakerDao, the blockchain startup behind the ERC-20 based stablecoin DAI, announced it has started a pilot program with the supply chain management startup Tradeshift to speed up the payment process for small businesses via blockchain.

In an announcement on Friday, MakerDAO said its stablecoin is now being tested with the Tradeshift Cash solution in a bid to tokenize unpaid invoices of small businesses which could be sold at a discount to crypto investors so that small businesses can receive payments upfront.

According to Tradeshift's website, the Tradeshift Cash solution currently allows small businesses to sell their outstanding invoices as an asset type to traditional investors at a discount.

Rune Christensen, founder of MakerDAO, told CoinDesk in an interview that by introducing a stablecoin to Tradeshift's existing system, the pilot would bring this type of asset class to more cryptocurrency investors.

The fund will then be exchanged into a fiat currency and subsequently credited to the small business' account.

As a stablecoin's price can remain relatively constant, the hope is that the pilot could allow more small businesses to have the option to sell their pending invoices to receive payments faster.

"The trade receivables market has very tight margins, which leaves no room for a volatile digital currency as instrument for settlement," Tradeshift's co-founder Gert Sylvest said in the announcement.

MakerDAO said it is also planning to launch an open platform with Tradeshift where small businesses can directly interact with cryptocurrency investors in order to further increase the market liquidity.

"It will be very cheap because there will be a lot of money available for the small businesses, and also there will be a lot of small businesses available for the investors to choose from," Christensen said.

The pilot also comes just a month after Tradeshift announced plans to expand into blockchain following its $250 million Series E funding round led by Goldman Sachs.