Arf, a regulated settlement banking platform in Switzerland, has partnered with the Stellar Development Foundation to offer a new financing solution for licensed financial institutions. This solution is the first in the world to offer unsecured, short-term financing options based on US Dollar Coin (USDC).
According to the report, this partnership aims to address the liquidity limitations encountered by payment and remittance firms in cross-border payments.
The solution, known as Arf Credit Line, was developed on the Stellar network. It uses Circle’s USDC and provides unsecured, short-term working capital to licensed financial institutions worldwide. Qualified institutions can leverage the Arf Credit Line to facilitate same-day settlements with their partners in desired countries without the need for pre-funding or extra collateral.
The Arf Credit Line eliminates the capital-intensive business model for senders and the counterparty risk for receivers involved in cross-border payments. Additionally, since all transactions are conducted on-chain with USDC, money transfers can be tracked transparently without intermediaries.
Arf’s CEO, Ali Erhat Nalbant, noted that “there are more than $4 trillion in pre-funded accounts that could be used for global payments’ growth and development instead of staying idle.”
Nalbant stated that by utilizing the Arf Credit Line, significant amounts of trapped capital could be freed to fuel substantial industry expansion worth trillions of dollars.
According to Nalbant, Arf presently facilitates over 800 money transfer locations across the globe to execute same-day Treasury settlements with their partners in full compliance. He believes this will enable the company to flourish and compete globally.
Denelle Dixon, CEO and Executive Director of Stellar Development Foundation, stated that his organization backs Arf’s efforts to develop blockchain solutions that can transparently address liquidity constraints in cross-border payments. Dixon emphasized that groundbreaking solutions such as Arf’s Credit Line further strengthen their dedication to making financial services more inclusive.
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