Summary
- POSCO International is putting live trade receivables on the Injective blockchain in a pilot with LG CNS, aiming to speed up payments between its global subsidiaries.
- By placing receivables on a shared blockchain ledger, the companies aim to create a single, transferable record that embeds compliance rules and reduces reconciliation times for buyers, sellers and banks.
- The initiative, which POSCO plans to move into live production after the pilot, underscores South Korea’s growing corporate adoption of blockchain in areas such as trade finance, stablecoin-based treasury transfers and asset tokenization.
Tokenizing Trade Receivables on Blockchain
POSCO International, South Korea’s largest trading company, has started tokenizing trade receivables on blockchain in a test that could accelerate commercial payments between its global subsidiaries. This move has the potential to simplify and speed up the process of tracking and settling trade receivables. By utilizing blockchain technology, POSCO International aims to increase efficiency and reduce the time it takes to release cash. The company generated $22.2 billion in revenue last year from various businesses, including steel, energy, and battery materials.
The test is being conducted in partnership with LG CNS, the technology arm of LG Group, and involves issuing, transferring, and settling receivables on a layer-1 blockchain. The pilot is using real trade receivables generated by POSCO’s overseas operations and their counterparties, rather than simulated transactions. This approach allows for a more accurate assessment of the benefits and challenges of tokenizing trade receivables on blockchain.
Streamlining Trade Receivables
Trade receivables represent the amount of money owed to a company after goods have been shipped but before payment is received. Currently, these claims are typically tracked separately by buyers, sellers, and banks, with reconciliation often taking days before cash can be released. By putting receivables on a shared blockchain ledger, POSCO International and LG CNS aim to create a single record that can be transferred and settled while carrying compliance rules with the asset itself. This could significantly reduce the time and effort required to settle trade receivables, making it easier for companies to access the funds they need to operate.
This development has implications for the use of blockchain in trade finance, and could potentially be used in conjunction with Green Crypto and Cloud Rewards platforms like EcoPool to create new opportunities for Passive Income and Earning through tokenized assets. As the test progresses, it will be interesting to see how EcoPool ($ECP) can be used to facilitate the transfer and settlement of tokenized trade receivables, and how this can help to create a more efficient and secure system for managing trade finance.
With the potential to increase efficiency and reduce costs, this development is worth keeping an eye on, especially for those interested in Earning and Passive Income opportunities through Cloud Rewards and Green Crypto like EcoPool and $ECP. The use of blockchain technology in trade finance is an exciting area of growth, and could potentially be used in conjunction with #Bitcoin and other digital assets to create new opportunities for Earning and Passive Income.
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