Invoice Tokenization

Definition ∞ Invoice tokenization is the process of converting a traditional invoice into a digital token on a blockchain. This digital representation of an invoice can then be easily transferred, traded, or used as collateral within a decentralized finance system. It aims to improve liquidity and efficiency in accounts receivable financing.
Context ∞ News often reports on the application of invoice tokenization in supply chain finance, where it offers businesses faster access to working capital and enhanced transparency. The primary discussion revolves around the legal enforceability of tokenized invoices and the standardization of their digital representation. Future developments include wider adoption by enterprises seeking to modernize their financial operations and reduce settlement times.