Enabling High-Value Cross-Border Settlement with Stablecoins

Client Overview

The client is a cross-border commodities trading platform facilitating international transactions in metals, agricultural products, and chemical commodities. On one side, the platform connects upstream suppliers, mines, and trading companies. On the other, it serves small and mid-sized processors and trading firms worldwide. Through online matching, order management, and logistics coordination, the platform enables efficient cross-border trade execution.

Individual transaction sizes typically range from hundreds of thousands to tens of millions of US dollars. With multiple parties, currencies, and payment milestones involved, the platform places stringent requirements on the timeliness and security of fund flows.

Business Challenges

Under traditional cross-border payment frameworks, the platform and its participants encountered several practical challenges:

• Slow and costly cross-border collections: Buyers use different currencies and remittance methods, often involving multiple intermediary banks. Settlement timelines are unpredictable, while fees and FX losses represent a significant cost component, increasing pressure on working capital.

• Lengthy, multi-party settlement chains: A single transaction may involve upstream suppliers, shipping or logistics providers, agents, and platform revenue sharing. Multiple payments and reconciliations are required, making manual processing complex and error-prone.

• Increased compliance and transaction risk demands: High-value cross-border fund movements must meet stringent AML and sanctions compliance standards. Exposure to high-risk funds can introduce downstream compliance risk across the entire trade chain.

Cobo’s Solution

• Dedicated stablecoin collection channels by contract or shipment: A unique stablecoin collection profile is established for each contract or shipment. The platform supports staged payments aligned with trade milestones, such as prepayments, shipment payments, and arrival payments. Once on-chain funds are received, the system triggers automated callbacks and updates contract and order payment status in real time.

• Unified custody with milestone-based payouts: Stablecoins paid by buyers are centrally custodied within Cobo’s wallet infrastructure. Upon key trade events such as bill of lading issuance, inspection clearance, or warehouse receipt confirmation, the platform can initiate batch payouts to suppliers, logistics providers, and agents, with a single instruction executing multiple on-chain disbursements.

• Automated on-chain transaction monitoring: Backed by an intelligent risk engine, Cobo performs high-frequency KYT/AML screening across on-chain deposits, withdrawals, and transfers to detect sanctioned entities and high-risk interaction patterns. Based on predefined policies, suspicious transactions can be automatically flagged, blocked, or routed for manual review, ensuring secure and compliant fund flows.

• API integration and automated reconciliation: Through API integration with the platform’s existing order and settlement systems, collection, disbursement, fees, and risk flags are synchronized automatically. Finance teams can generate reconciliation reports by contract, shipment, or customer with a single action.

Results and Impact

• Improved capital turnover aligned with trade cycles: By structuring fund collection and payout around contracts and shipment schedules, and combining this with the fast settlement characteristics of stablecoins, the platform significantly reduced the time during which goods were in transit while funds were unsettled.

• Clearer settlement and reconciliation workflows: Each shipment is linked to a dedicated collection channel and corresponding on-chain records. Funds are automatically matched to contract and batch identifiers, materially reducing settlement mismatches and documentation errors.

• Stronger compliance controls: The combination of KYT and AML screening with predefined handling mechanisms ensures that high-risk funds are identified and isolated before entering core business workflows. This lowers compliance risk across the trade chain while reducing the manual burden on operations and compliance teams.