ZTLment joins Danish FSAs regulatory sandbox to test B2B payments execution on Algorand blockchain

Test program will provide regulatory clarity on the company’s smart contract settlement solution, which enables cross-border trade between small- and medium sized enterprises (SME)

Press release by ZTLment, Copenhagen 2021–04–22

ZTLment, a fintech company enabling cross-border trade between SMEs via programmable money, announces that it joins the regulatory sandbox of the Danish Financial Supervisory Authority (Danish FSA) as the first company in 2021.

A new way of doing settlements

Towards summer a test program will provide regulatory clarity on the company’s smart contract settlement solution.

The use of blockchain and smart contracts have the potential to change the way in which payments are settled, by providing a more flexible and automatic alternative to existing solutions. The Danish FSA is committed to exploring the potential and assuring that it is fulfilled in a way that ensures that it can be applied safe and effectively by Danish consumers and companies. ZTLments participation in FT Lab provides a suitable case in which it can be examined in practice how blockchain and smart contracts can be used for this.”, said Director at the Danish FSAs division for Fintech, Payment Services and Governance, Tobias Thygesen in an official press release.

Co-founder and CEO of ZTLment, Mads Stolberg-Larsen, looks forward to start.

We are building a solution that can save SMEs a lot of time and money. However, it doesn’t fit squarely into existing regulatory checkboxes. By joining the Danish FSAs regulatory sandbox we can figure out which boxes to check in a dialogue based process. Furthermore, we can collaboratively pinpoint risks and rewards of using programmable money in B2B payments.”, said Stolberg-Larsen.

Eliminate administration overheads

According to the Bank of International Settlements six out of ten cross-border B2B payments require some kind of manual intervention, each taking at least 15 to 20 minutes. ZTLment is cutting this proces time down to zero.

Cross-border payments systems have been neglected for too long. Productivity losses are measured in trillions of dollars globally and administrative burdens often falls heaviest on SMEs. With money finally being made programmable, we can think differently about how to settle trades and thus eliminate administration overheads.”, said Stolberg-Larsen.

Self-driving trade process

The goal is to deliver a self-driving trade process via so called smart contracts.

We use smart contracts to automate transaction workflows with simple IF-THEN statements. For example IF goods are received THEN money is moved from the buyer to the supplier in exactly 30 days. It is like self-driving cars, but just for trade processes.”, said co-founder and CTO, Jason Spasovski.

Deployed first in food industry

ZTLment’s solution will first be deployed with sustainable SMEs in the €1.2tn European food and drinks market. In close collaboration with the B2B marketplace, Fooducer, an integrated workflow has been co-created for this fast-growing market segment.

“Sustainable food producers and -buyers face enormous administrative burdens when trading across borders. First you have a manual ordering process. Then you must take care of transportation. On top of that you have to handle invoices and payments.”, explained CEO of Fooducer, Casper Kraken, and continued: ”With ZTLment embedded in the Fooducer platform, we can connect all these elements and have data inputs from the ordering and transportation process directly trigger payments and finance. It becomes an integrated workflow.

Using programmable euro

To deliver its solution, ZTLment uses programmable euro on the Algorand blockchain.

“Our solution uses normal euro to settle trades. Before even incorporating we established a partnership with Monerium, which is the world’s first issuer of e-money to blockchains and a company I have worked with before.”, said Stolberg-Larsen.

With respect to the choice of blockchain, Algorand was preferable for several reasons.

“Algorand uses a novel consensus protocol, which unlike some other alternatives does not use energy to mint new blocks. Besides from this obvious benefit, Algorand has a set of programming features that makes it well suited for B2B trade and it has a strong technical community behind it.”, said Spasovski.

Help SMEs realize their global potential

The regulatory sandbox program will run from spring to early summer. If everything goes well, the plan is to expand aggressively when the regulatory framework is in place.

We firmly believe our technology can help SMEs realize their global potential. Too often international success is determined by the size of the company instead of the quality of the product. We want to do our part to change that.”, said Stolberg-Larsen.

About ZTLment

ZTLment is a fintech company that enables cross-border trade between SMEs via programmable money.

A smart contract settlement solution implemented on the Algorand blockchain helps SMEs cut time spent on invoice- and payments processing down to zero.

The company is founded by Mads Stolberg-Larsen and Jason Spasovski, who previously worked at the B2B platform, Tradeshift, and the NextGen technologies team of Deloitte Denmark.

About the Danish FSAs regulatory sandbox

The purpose of the Danish FSAs regulatory sandbox, FT Lab, is to give selected companies the opportunity to test their technologies and business models within financial services in a safe environment. The Danish FSA expects a test to run for up to six months and with a limited amount of customers depending on the specific agreement between the Danish FSA and the concerned company. During a test the selected companies will always be required to operate within the boundaries of the financial regulation.

Head of Fintech and Blockchain @Tradeshift Frontiers. Currently living in London. Enjoy windsurfing in my spare time.

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