Structured Trust

When two businesses trade across a border for the first time, each is exposed to the other. The seller states at dispatch what the buyer cannot check until arrival. The buyer can dispute the goods once they land. Neither has a practical remedy afterwards, because litigating a modest shipment across a border is not worth doing. The risk has to be dealt with inside the settlement, rather than chased once the money has gone.

Every instrument in trade finance mitigates some risk. A letter of credit protects the seller against non-payment and does that well, but it checks documents rather than goods and it rests on the buyer's credit. Insurance covers non-payment, not conformity. Escrow secures the cash and reads nothing about the goods. Not one of them reaches the risk that sits in the trade itself.

The Asian Development Bank counts roughly US$2.5 trillion of trade finance asked for and refused. By its own definition that is unmet demand for two things, risk mitigation and lending. Lending has products. The risk-mitigation side does not.

Capital rules make unrated smaller exposures uneconomic on a bank's balance sheet, which is what puts this population outside. The same rules do not reach a product that lends nothing.

A settlement product for the risk that sits in the trade.

Every trade needs a rule for when the money moves. Today that rule turns on someone's say-so, or on a document's form. Structured Trust turns it on facts about the shipment itself, read by machine, against a standard the two parties fixed before the goods moved.

The money is held from the start, and released when those facts meet that standard. What the reading cannot cover is named at the outset and priced by the parties, rather than left to be argued about afterwards.

You decide together what a completed trade looks like. Mithril holds you both to that, and to nothing else.

Escrow releases when someone signs off, or when a document turns up. Mithril releases on the trade itself, not on a signature and not on a piece of paper about the trade.

Escrow secures the money. Mithril secures the trade.

The structure is architected so that your money sits outside Mithril's own balance sheet, and can only ever be paid to the seller once the trade is proven, or returned to you. That protection runs on blockchain, which is what lets the money sit off our books this way. You do not need to know anything about the technology that makes it work; it sits underneath, doing one job, which is holding the money until the trade is done.

Mithril settles under English law, the most widely chosen jurisdiction in the world for cross-border commercial contracts, and one whose courts are trusted to enforce them. Since the Electronic Trade Documents Act 2023, electronic trade documents carry the same legal standing as paper ones under English law, so digital settlement can attach to the real documents of a real trade. A UK framework for digital-money settlement is taking shape now. London is where the law that settlement has to stand on already sits.

Mithril is in active development, but not yet live. We are building toward a Pilot Programme with first trades amongst a small group of selected counterparties.