Arf, a global liquidity and settlement platform, has partnered with Huma Finance to introduce the world’s first-ever fully transparent on-chain liquidity solution for cross-border payments. This strategic partnership aims to address the lack of transparency and liquidity challenges in the industry.
Currently, financial institutions face liquidity constraints when it comes to achieving same-day cross-border settlements. They are limited by the amount they can borrow based on the cash collateral they can provide, resulting in approximately $4 trillion locked in pre-funded accounts. This hidden cost is a significant burden on the global payments industry.
To overcome this costly prefunding requirement and reduce delays and counter-party risks, Arf offers short-term USDC-based working capital loans to licensed financial institutions. These loans enable immediate settlement of cross-border payments in USDC, making the process more accessible and faster for everyday individuals.
Arf’s solution allows financial institutions to expand their coverage and volume without the need for prefunding or additional working capital. The platform leverages a blend of traditional and alternative data, including a proprietary credit engine and an in-house credit score, to provide optimized risk-adjusted pricing and a customized financial experience for its clients.
In collaboration with Huma Finance, Arf is creating the world’s first on-chain credit pool for cross-border payments. This partnership aims to enhance transparency and traceability in the industry by tokenizing cross-border payment orders through the Huma Protocol in a privacy-preserving manner. These tokens are then used as collateral to borrow from the lending pools.
By bringing all loans, repayments, and receivables onto the blockchain, the collaboration ensures a fully traceable borrowing record. Every transaction, including late repayments and default rates, will be visible on-chain, providing comprehensive and daily transparency while maintaining privacy. This allows lenders to assess risks effectively and promote secure working capital, while financial institutions can expand their operations and meet the increasing global demand with enhanced access to liquidity.
Arf Co-founder and CEO Ali Erhat Nalbant expressed the company’s commitment to making liquidity more accessible and bringing transparency to cross-border payments by utilizing the right digital assets. Huma Finance Co-founder Erbil Karaman emphasized that the partnership embodies their vision of creating a more equitable financial ecosystem and driving the evolution of global finance forward.
Arf is a global liquidity and settlement platform that offers digital asset-based working capital credit lines and settlement services for licensed financial institutions. The platform aims to overcome liquidity constraints in the industry and empower financial institutions worldwide.
Huma Finance, on the other hand, builds infrastructure for real-world lending solutions and aims to make the crypto industry more accessible and supportive of practical use cases. They enable borrowing against cash flows and receivables, opening up new possibilities for individuals and businesses around the world.