After years of announcements regarding blockchain Proofs of Concept and Pilots, a first successful enterprise grade deployment that includes multiple financial services organizations has taken place. MonetaGo, along with Indian Factoring Exchanges - A.TREDs, RXIL and M1 Exchange have launched a blockchain network to prevent financial fraud and double invoicing problems. The network provides a common platform not controlled by any one financial institution to securely and confidentially share information which reduces fraud around receivables financing.
The Reserve Bank of India licensed three entities to provide a more efficient venue to do this: RXIL, A.TReDS, and M1xhange.
The platforms count some of the biggest Indian banks and a number of foreign banks as funding sources and enable the discounting of invoices from corporate organizations, government departments, and public sector undertakings.
Also, it is built on Hyperledger Fabric and does not rely on cryptocurrencies to operate.
These exchanges provide competitive marketplaces for small businesses to obtain the best financing possible.
Kalyan Basu, M.D. & C.E.O, A.TReDS added, “Our clients are particularly sensitive about their sourcing inputs, and we absolutely could not broadcast any of their private information to a shared network. This technology however enables us to work together with the other exchanges to achieve shared goals without sharing specific data."
MonetaGo designed and implemented the production blockchain. This application of blockchain technology, which avoids tokens or cryptocurrencies for both regulatory and cost forecasting reasons, has the potential to drastically reduce fraud related to invoice financing across India and in other regions where it is adopted.
“This is a significant milestone for blockchain technology and this is only the beginning,” said MonetaGo CEO Jesse Chenard.
Kashinath Katakdhond, MD & CEO, RXIL, said, “So far we had only heard of blockchain being used for cryptocurrencies. With the implementation of the MonetaGo blockchain solution we have a tool for mitigating systemic risk especially in trade receivable discounting."
Katakdhond adds, "This is a simple and low cost technology innovation which helps us mitigate risks arising from multiple financing of the same bills across the platforms in addition to our existing risk management processes which provides a clear benefit. The real benefit will actually come when other financiers such as banks, NBFCs, and others join MonetaGo’s platform.”
Sundeep Mohindru Director and Founder of M1xhange said, “There has been a lot of press about blockchain in the last few years however this was the first time we could apply it in day to day operations and enhance the control over duplicity of transactions.”
Furthermore, the network provides the opportunity for the participants to build additional functionality on the new network.