Invoice Factoring as the Basis for a Digital Token Currency

* Article: Invoice Factoring as the Basis for a Digital Token Currency. By Thomas Greco.

URL = https://beyondmoney.net/wp-content/uploads/2024/12/544776-invoice-factoring-greco.pdf

Abstract

"This paper proposes and describes a system that can solve two of the most pressing problems that confront communities today. Firstly, it can provide small- and medium-sized enterprises (SMEs) with a source of credit other than borrowing from banks. The basic structure of this system is akin to the Swiss WIR cooperative clearing circle (now called the WIR Bank but formerly called the Wirtschaftsring-Genossenschaft) and the more recent commercial trade exchanges and mutual credit clearing circles, which enable SMEs to provide one another with adequate amounts of credit which can be under their own collective control.

Secondly, the proposed system can, at the same time, provide community and regional economies with an independent non-political circulating voucher currency in the form of digital tokens that can serve as an alternative and supplementary means of payment to political fiat money. These are digital tokens which, unlike Bitcoin and other similar crypto so-called currencies, are based on and redeemable for real goods and services that are available in the market.

The proposed system is inspired by and in some ways mimics the conventional and long-established process known as “factoring” in which businesses effectively sell their accounts receivable/invoices to obtain cash sooner from a lender called a “factor” rather than waiting for their customers to pay what they owe later. By aggregating the invoices of many SMEs into a commitment pool, a cooperative entity similar to a “factor” has the capability of creating a digital token currency which is properly based on promises to deliver real value and can be put into circulation by the SMEs that sell their invoices. This paper explains the creation, circulation, redemption, and retirement of these tokens in a repetitive and continuing process."