'Tokenized dollars will obviate the ACH': Caitlin Long

The way you collect payments and settle financing contracts may be about to change. Caitlin Long, CEO of Custodia Bank, predicts that 'tokenized dollars' will eventually replace the Automated Clearing House (ACH) system. For retailers, this means moving away from the slow, multi-day waiting periods associated with standard bank transfers. Instead of waiting for funds to clear after a customer signs a financing agreement, tokenization allows for programmable, instant settlement. This shift addresses a major pain point for merchant operators: reconciliation and fraud. ACH payments are prone to delays and can be reversed days later, creating a 'float' risk. Tokenized deposits act as digital representations of cash that move across blockchains or distributed ledgers instantly. This ensures that the moment a lender approves a customer and triggers a payout, the money is effectively in your account. While the technology is still in the early adoption phase, it signals a future where merchant liquidity is significantly improved. You won't have to manage the gap between a sale and the actual receipt of funds, simplifying your back-office accounting and improving cash flow management.

Source: American Banker — Top News

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