Supply Chain Finance

Definition ∞ Supply chain finance involves a set of financial solutions that optimize working capital for businesses involved in a supply chain. This includes financing options like invoice factoring or dynamic discounting, aiming to improve liquidity and reduce risk for suppliers and buyers. Blockchain technology can enhance supply chain finance by providing immutable records of transactions and goods movement. This transparency can facilitate faster, more secure financing decisions. It streamlines financial flows across a chain.
Context ∞ News often covers how blockchain technology is being applied to modernize supply chain finance, offering greater visibility and efficiency. The ability to verify the authenticity and movement of goods on a distributed ledger reduces fraud and speeds up payment cycles. Challenges include interoperability between different blockchain platforms and the integration with existing legacy financial systems.