In a blockchain pilot involving Uber, HSBC, and Franklin Templeton, the company tested a model that invested corporate cash in a money market fund and allowed it to redeem part of that investment over the weekend.
Uber completed a pilot with HSBC, Franklin Templeton, Tradeweb, and Fireblocks to make more productive use of the money it keeps available for payments. According to a statement the companies shared with CoinDesk, the trial on the Canton Network tested whether corporate cash could be invested outside traditional market hours and accessed when needed.
The initiative focused on the extra cash large companies keep in their accounts for payments they may need to make overnight or on weekends. While that money sits ready, companies may miss out on returns available from short-term funds; once invested, however, it can take time to convert the funds back into cash.
Uber redeemed part of its fund shares over the weekend
During the pilot, Uber used HSBC’s tokenized bank deposits and Franklin Templeton’s tokenized money market fund shares to make purchases through Tradeweb. Fireblocks provided the wallet infrastructure for the transactions. Uber was able to redeem some of its fund shares and receive the proceeds, including over the weekend.
In this example, tokenization represented bank deposits and fund shares on a blockchain. The payment and fund shares changed hands together on the same network using delivery versus payment. This reduced the risk of one party delivering an asset and having to wait for payment in return.
Goal: less idle cash and longer investment periods
Odette Rodrigues, Uber’s vice president of corporate finance, treasury, and capital markets, said the model could offer the flexibility to improve returns on available cash while meeting payment obligations. According to Rodrigues, the structure could also reduce the need to hold extra cash for unexpected needs.
The goal is to enable companies to keep more money in investments that generate returns and access those funds when payments come due. Uber sees the completed pilot as a first step toward a more efficient model for managing working capital 24/7. The initiative is still in the pilot phase.
Not investment advice.