Stablecoin Arf Cross-Border Payments Network Announces Credit Line

Traditionally, when a money services business (MSB) wants to send money from one country to another, it has to pre-fund the same amount in the receiving country, resulting in tied capital, high opportunity cost and operational inefficiencies. Moreover, since cross-border transactions are often considered risky, access to credit has always been a major problem for MSBs.

Designed to empower licensed MSBs worldwide, the soon-to-be-launched Arf Credit emerged as an idea when Arf’s co-founders noticed that most MSBs were struggling with high pre-funding requirements and access limited to working capital.

Co-founder Kazım Rıfat Özyılmaz argues that MSBs have been underserved players in the financial sector, especially when it comes to access to working capital. “Of course, the industry must manage risks, but it must also find innovative ways to enable the growth of cross-border transactions,” he stresses.

“The real problem with today’s cross-border payments industry is that when you succeed as an ESM, you need more money to make it work,” says co-founder and CEO Ali Erhat Nalbant. “We developed Arf Credit as an API-based short-term transactional working capital in USDC so that ESMs can use stablecoins without pre-funding.”

Although options existed, most lenders only served customers with long-term credit needs or unique payment corridors. Application processes were lengthy and once credit was granted it had to be repaid whether it was used or not.

Co-founder Berhan Kongel says licensed MSBs can get the credit instantly with a repayment period of 2-7 days. “Each eligible ESM is assigned a certain amount of credit based on their transaction volumes within the Arf network. They only pay interest on the amount of credit used and can automate repayments,” he explains.

“We are truly excited to be a key player in enabling the cross-border payments industry to compliantly benefit from blockchain and digital assets,” said Ali Erhat Nalbant. “It was a much-needed improvement to global payments.”

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