Case Study:

MonetaGo builds world’s first blockchain production network with Hyperledger Fabric


MonetaGo is a software development company and Hyperledger member based in New York City that works with financial institutions and central banks around the world to provide private permissioned blockchain solutions.


To help micro, small, and medium enterprises gain better access to financing through real-time exchanges for secure, fraud-proof factoring of invoices.


  • Lower the risk for financiers on the network
  • Select the best blockchain platform to use: Hyperledger Fabric
  • Develop the business logic and hashing to prevent fraud
  • Go live with the production system and monitor its performance


Just three months after going live, the network already serves a significant percentage of the factoring market in India, processing thousands of invoices daily with no duplicate financing. This volume is growing quickly, with companies representing the vast majority of the market lined up to join. And the blockchain provided by Hyperledger Fabric has carried the growing workload without a hiccup.

Micro, Small and Medium-sized Enterprises in India

With Unpaid Invoices to Factor

What can you do if your business needs money and you’re holding a fistful of outstanding invoices from slow-paying customers?

Many small business owners would like to sell those invoices at a discount and let somebody else worry about collecting them. Called “receivables financing”—or “factoring” for short—this can be a quick way for a business to get much-needed cash.

But many firms are too small for any bank to bother with. They won’t put a lot of time into factoring small invoices when they could earn more processing invoices from a larger enterprise.

This puts extra strain on developing economies like India, where most businesses are small and many are close to the edge.

For example, factoring in India delivers a reported $219 Billion USD to the country’s micro, small, and medium enterprises (MSMEs). But that leaves another $188 Billion USD on the table as “unmet demand”—invoices no one else wants.

That’s why the Indian government recently stepped in to help. The Reserve Bank of India licensed three organizations to provide an online marketplace for factoring, called the Trade Receivables Discounting System (TReDS).

Each exchange operator—A.TReDS, M1xhange, and RXIL—has deep roots in finance and e-commerce. Through these exchanges, financiers bid on sets of invoices with lower risk, while sellers benefit from better prices and faster payments.

In this way, the system is designed to free up more funds for small companies and grow the country’s overall economy.

“The system is designed to free up more funds for small companies and grow the country’s overall economy.”

Lowering the risk for financiers

There’s just one wrinkle: fraud, as in fraudulent invoices.

For example, a 2016 study found that invoice fraud costs UK companies 9+ Billion pounds ($13.2 Billion USD)1 every year. All in all, experts say about 1 in 100 invoices is fraudulent.

Some cover goods or services that are never delivered. Some are fakes from companies with letterhead modelled after real suppliers. And some are duplicates sent in the hope that a sloppy bookkeeper will pay them twice.

So India’s e-discounting exchanges can’t afford to operate in isolation; to help protect financiers, they need a network to share information and prevent fraud.
That’s where New York City-based software development firm MonetaGo came in, landing the contract to build this secure network.

“The main problem was that a seller could approach more than one exchange with the same receivable at the same time to get duplicate financing,” says Brendan Taylor, MonetaGo’s CTO.

It was a classic double-spend problem. To head it off, the exchanges needed to share information with one another, carefully.

“No one wants to divulge who their clients are, what their volumes are, or anything about their successes,” says Taylor. “So how do you share information without really sharing information?”

This requirement led MonetaGo to see the new network as a perfect fit for blockchain.

Blockchain can provide “that golden source of information” with an immutable ledger shared among participants, notes Taylor, as long as the information being shared doesn’t risk anyone’s privacy.

The next challenge was to pick the right blockchain platform to fit these requirements.


Selecting the best blockchain platform

Taylor notes that choosing a platform is a critical decision for any startup.

He says his team analyzes every available platform so they know which platform best solves any particular problem.

Hyperledger Fabric was a natural framework to consider, especially since MonetaGo joined Hyperledger as a General Member two years earlier.

“We needed a flexible platform that could satisfy enterprise requirements and evolve efficiently over time,” says Taylor. And a key requirement for the Indian network was no need for tokens or altcoins; the system was designed for fiat currencies only.

“Pretty much every other blockchain platform had tokens somewhere in the system,” says Taylor. But not Hyperledger Fabric, which was not designed around any cryptocurrency.

His team could have taken a platform like Ethereum and hacked the code to get rid of the Ether token. But then, they’d be on their own to maintain and extend that code, with no community to help.

“With the community behind it, we gained the confidence that Hyperledger Fabric would have longevity, would evolve quickly, and would meet more of our requirements,” says Taylor. “So that’s what brought us to Hyperledger.”

“We’re not talking about a PDF scan… We’re talking about fully digitized machine-readable information extracted from each invoice and standardized among all the participants.”

Developing the business logic and hashing to prevent fraud

MonetaGo’s business model is to build solutions for specific use cases on top of an existing platform, and this system was no exception.

Hyperledger Fabric provided all the basic functions for the network, ordering system, certificate authority, and blockchain. On top of that, MonetaGo created the required business logic, applications, interfaces, and unique security provisions.

And the company created two ways to integrate into the network: an API for large exchanges to integrate directly into their own in-house systems using on-premise hardware, and a SaaS interface for smaller participants to use over the web.

There is no upfront cost to join the network. MonetaGo charges a transaction fee that participants pay as they go.

Some of the proprietary code Taylor’s team developed is for hashing the data extracted from invoices to create a unique set of fingerprints for each invoice.
“We’re not talking about a PDF scan,” says Taylor. “We’re talking about fully digitized machine-readable information extracted from each invoice and standardized among all the participants.”

The blockchain stores the hashes from each invoice. Then the system matches each invoice in a proposed sale against all the other fingerprints to instantly detect any duplicates.

“That means every exchange can check whether any invoice has been financed elsewhere, without actually knowing anyone else’s business. It’s an efficient way to keep information private, while sharing at the same time.”


Going live with the production system

The network went live at the end of March 2018, and is now processing thousands of invoices a day without a hiccup.

“We’re not anywhere near the limit we can handle,” notes Taylor, “so throughput has been no issue at all.”

MonetaGo CEO Jesse Chenard calls the new system “the first enterprise-grade blockchain in production for everyday use by multiple financial organizations.”
“We’ve deployed an enterprise blockchain that provides a common platform not controlled by any one financial institution to securely and confidentially share information,” says Chenard.

He notes that, “we think this is a significant milestone—not only for our community, but for DL technology at large.”

The system is already well-known across the factoring space in India, with participants worth 50% of the market already signed up and those worth another 45% interested in joining.

By reducing the risk of fraud, the network makes that segment more attractive to financiers who can expect a higher loss-adjusted return on their investment, says Taylor.

Some of the biggest banks in India and a number of foreign banks are now funding these receivables, giving many of the country’s smaller businesses a welcome injection of cash.

“Receivables are just one type of asset. The same framework could be used for any type of asset. So there are opportunities to expand this service to other assets within India and elsewhere in the world.”

MonetaGo is technology-agnostic

Despite using Hyperledger Fabric for the Indian network, Taylor’s team keeps a close eye on other technologies.

“Although we are great supporters of Hyperledger Fabric, we remain agnostic about the technology,” he says. They’re prepared to switch out the blockchain platform to use the best available solution.

That’s why MonetaGo is also a partner with R3, a software firm that worked with many financial institutions, regulators, and tech companies to develop the Corda blockchain platform.

“We have invested resources in R3’s Corda to understand how it works,” says Taylor. After working with both platforms, Taylor knows first-hand their key differences.

“We see Corda more as a workflow automation tool,” he notes. He says it’s best for automating a peer-to-peer process: any kind of over-the-counter financial transaction with a lot of manual intervention. “Those types of transactions are perfect for Corda.”

But the Indian e-discounting system needed something more.

“For our three exchanges linked in a network, Corda would not make sense,” he says. “Hyperledger Fabric is a true blockchain and distributed ledger. When you require a global broadcast to share common information among multiple participants, Hyperledger Fabric is perfect.

“As long as Hyperledger Fabric is the leader—and we see it as the leader—we continue to contribute to it and use it.”


A real-time lien registry for many types of assets

The e-discounting network has been a world first, and certainly the first blockchain production system in India.

As for the future, MonetaGo is already planning similar projects in other countries, dealing with other types of transactions beyond factoring.

“Essentially what we have is a real-time registry where you can mark liens against an asset,” says Taylor.

And receivables are just one type of asset. The same framework could be used for any type of asset. So there are opportunities to expand this service to other assets within India and elsewhere in the world.

For example, in Europe factoring is less restricted than in North America, making this fertile ground for further MonetaGo projects. And among the other assets that a similar e-discounting system could handle are letters of credit and moveable asset titles.


Advice for other blockchain developers

When MonetaGo started in 2014, the founders wanted to do cross-border money transfers via Bitcoin. But resistance from bankers and red tape from regulators made that a tough sell.

Next the company proposed using DL technologies to streamline financial transactions. But that was too vast. Eventually the team started to identify use cases that were smaller and easier to implement, where they could quickly get a consensus to move ahead.

All this taught some valuable lessons. And Taylor’s best advice has nothing to do with technology.

“The real challenges facing the DL industry are on the business side,” he says. “You need to get commitment from competing corporations to collaborate and share information. But if you have too many participants, that becomes very difficult.”

His advice is to identify use cases with a high concentration of market leaders, where you only need to get a handful of participants on board to move ahead. When the system is built, the rest will follow.

Staying grounded in the real world is also important.

“A great reason for our success is that we became a solutions-first company, rather than a technology-first company,” says Taylor.

He believes the main challenge for many people in the blockchain world is that they’re looking for a problem for the technology to solve.

“We identify the problem first, and then identify the fact that DL technology might be a good solution for the problem. That’s the way to go about it.”

“As long as Hyperledger Fabric is the leader—and we see it as the leader—we continue to contribute to it and use it.”

About MonetaGo

MonetaGo works with financial institutions and central banks around the world to provide private permissioned blockchain solutions; solutions that don’t disrupt existing legacy technologies or workflows. Launched in 2014 as a global exchange, MonetaGo is focused on building settlement and reconciliation solutions that interoperate within existing regulatory systems using fiat currencies, not cryptocurrencies. To learn more, visit

About Hyperledger

Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration including leaders in banking, finance, Internet of Things, manufacturing, supply chain, and technology. The Linux Foundation hosts Hyperledger under the foundation. To learn more, visit