Metalshub facilitates first cross-border transaction financing through electronic promissory note

In partnership with FQX, a Swiss-based fintech company focused on electronic negotiable instruments, it will soon be possible to securitise and transfer trade receivables of transactions that were concluded on the Metalshub platform.

In the form of electronic promissory notes (eNotes™), the securitised trade receivables can be sold for a negotiable discount rate to investors that proceed to hold the notes until maturity.

“Promissory notes are an internationally recognised financial instrument that enables companies and individuals to secure financing on the legal basis of an unconditional promise to pay.”, explains Dr. Frank Jackel, Managing Director at Metalshub. “This framework paves the way for unprecedented flexibility and efficiency in international trade.”

Just in 2019, the global trade finance gap was estimated to be at around USD 2 trillion. With the COVID-19 outbreak, this gap is said to have grown to even higher levels. New research of the International Chamber of Commerce (ICC) shows that there is an estimated capacity of USD 1.9 to USD 5 trillion in the trade credit market needed only to return to 2019 levels.

This is nothing new as small-medium enterprises (SMEs) have struggled for a long time to access trade financing due to a variety of factors including creditworthiness, collateral requirements, short-term liquidity and political or currency risk (Standard Chartered, 2020). Digitalisation and the use of blockchain technology are promising solutions to help closing this critical gap in trade financing worldwide.

“With a new Metalshub trade finance solution, we will be able to offer more attractive credit terms to our buyers, with the opportunity for instant liquidity at competitive discount rates.”, states Branislav Mikoláško, COO at Commexim Group. “Metalshub was very supportive in guiding us through the onboarding process of the solution.”

The eNote™ is stored on the Swiss Trust Chain of Swisscom and Swiss Post, thereby ensuring fully digital transactions and minimizing fraud risks. Liquidity flows directly to the companies that need financing without the need to involve other intermediaries. This solution will be used to ease the pressure for Metalshub trusted users to extend payment terms, while facilitating working capital management and offering instant liquidity to reliable suppliers. The solution has a scalable and secure infrastructure, and the eNote™ is legally enforceable in the courts of 165 countries.

For more information and graphics, please visit: https://www.metals-hub.com/de/press/.

About FQX

FQX provides a secure, efficient and compliant infrastructure for electronically negotiable debt that is tradeable. It combines the best legal, financial and technological expertise into an electronic negotiable instrument that is enforceable in the courts of 165 countries. FQX is a partner of Swisscom for the use of Qualified Electronic Signatures. All eNotes are stored on the banking-grade DLT- infrastructure of Swisscom and Swiss Post.

For more information, visit https://fqx.ch/.

About Metalshub

Metalshub is one of the pioneers of digital transformation in the metals industry. The software start-up was founded in 2016 in Düsseldorf by Dr. Sebastian Kreft and Dr. Frank Jackel with the vision of connecting companies in the industry with a digital platform. Digital supply chains can help reduce costs and increase efficiency. More than 1,000 companies are already using Metalshub, including more than 200 foundries and steel mills that have digitized their purchasing processes with Metalshub. In 2020, more than $300 million in purchasing volume was concluded through Metalshub.