How to Tokenize Invoices and Trade Receivables

Small and medium-sized enterprises (SMEs) can now unlock liquidity by using a tokenization platform to convert their invoices and trade receivables into digital assets. In simple terms, tokenization means turning real-world assets, like unpaid invoices, into blockchain-based tokens that can be traded or financed. For SMEs, this opens a path to faster, more flexible financing. For investors, it creates a new category of tokenized real-world assets with real cash flow.

What Is Invoice Tokenization?

Invoice tokenization is the process of converting a company’s receivables into digital tokens. These tokens represent a legal right to future payment and can be sold to investors. When the underlying invoice is paid, the investor receives the proceeds, automatically distributed by smart contracts on the blockchain.

Tokenization makes invoices transferable, transparent, and programmable, allowing real-time tracking, secure ownership, and faster settlement.

Why Tokenize Invoices? Benefits for SMEs and Investors

For SMEs:

• Faster access to working capital
• Lower cost of financing vs. traditional factoring
• Global reach to investors
• No debt added to the balance sheet

For Investors:

• Short-term yield (30–90 day maturities)
• Access to real-world cash flows
• Diversification through fractional investing
• Transparent, on-chain audit trails

Step-by-Step: How to Tokenize Invoices

1. Select a Tokenization Platform

Choose a compliant asset tokenization platform (like ONINO) with:

• Smart contract tools
• KYC/AML onboarding
• Investor dashboards
• Support for EVM-compatible blockchains

2. Prepare Legal and Invoice Documents

• Ensure invoice is valid and undisputed
• Assign receivables to a legal vehicle or trust
• Structure issuance under compliant tokenization rules (e.g., MiFID II)

3. Token Design & Smart Contract Deployment

• Use a tokenization SDK or template to create tokens
• Smart contracts handle:
  • Ownership
  • Transfer restrictions
  • Payout logic

4. Primary Token Offering

• List tokens on a primary token offering platform
• Onboard investors via KYC/AML
• Sell tokens (fractionally if needed) for crypto or fiat

5. Settlement and Payouts

• Debtor pays invoice to escrow account
• Smart contract tokenization logic automatically sends funds to token holders

6. Secondary Market Trading (Optional)

• Enable trading on a tokenized investment platform
• Use built-in compliance logic to enforce restrictions

Compliance & Technology Considerations

• Use an EVM-compatible blockchain for broad support
• Partner with platforms offering regulated tokenized assets and built-in compliance
• Ensure tokens comply with security tokens EU or tokenized securities Germany rules

Real-World Examples

• Global SMEs raise liquidity by selling invoice tokens to international investors
• Supply chain projects improve cross-border payments using invoice tokens
• DeFi protocols like Centrifuge use tokenized invoices as collateral for crypto loans

Why This Matters

• Invoice tokenization gives SMEs a new form of tokenized fundraising
• Investors gain access to digital securities backed by real-world revenue
• Platforms like ONINO offer the infrastructure to make it fast, safe, and scalable

Conclusion

Tokenizing trade receivables is a powerful way for SMEs to convert unpaid invoices into immediate cash. It combines blockchain efficiency with investor trust, offering a win-win: SMEs access capital without debt, and investors gain short-term yield from transparent, real-world assets.

With the right tokenization platform, legal support, and smart contract tools, invoice tokenization is no longer a niche idea, it's a scalable solution for modern finance.

Want to see how ONINO can help you tokenize invoices? Book a free demo today.