Deepening the Secondary Market: Integrating Trade Credit into Market Clearing with the Cycles Protocol
Unlocking trillions in hidden business debt to speed up payments
Most payment systems ignore trade credit—the informal IOUs between businesses that represent enormous untapped liquidity. A new protocol called Cycles can find and clear these debts directly without requiring a middleman to take on the risk, potentially integrating trillions of dollars in business-to-business lending into formal settlement systems.
Businesses currently wait weeks to settle payments because trade credit sits outside official clearing systems. By tapping this hidden liquidity, companies could access cash faster and cut the working capital they need to tie up. This could be especially powerful for small suppliers and developing economies where informal credit chains are most common and access to capital is most constrained.