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Decentralized finance for supply chain cash-flow: token-to-fiat currency exchange model

Author

Listed:
  • Nidhin SREEDAS E

    (National Institute of Technology Calicut, Kerala, India)

  • V. Madhusudanan PILLAI

    (National Institute of Technology Calicut, Kerala, India)

  • Hiran V. NATH

    (National Institute of Technology Calicut, Kerala, India)

Abstract

Background: Blockchain-enabled Decentralized Finance (DeFi) has the potential to improve supply-chain cash-flow coordination through automated, transparent, traceable and immutable transactions. However, many existing DeFi-based supply-chain solutions rely on external blockchain platforms and publicly traded cryptocurrencies, raising concerns about reliance on third parties, transaction costs, governance limitations, regulatory uncertainty, and cryptocurrency price volatility. These concerns are particularly important in multi-tier supply chains, where payment delays and fluctuations in settlement value can affect working capital stability across upstream and downstream firms. Methods: This study combines empirical analysis of cryptocurrency volatility, Design Science Research, and simulation-based evaluation. Daily price data for Ether, Bitcoin, Solana, and XRP were analysed from 1 March 2025 to 1 March 2026 to assess settlement-value instability. Based on the identified problem, a permissioned, self-governed DeFi application built on a blockchain was developed, with an internal token-to-fiat exchange mechanism. A Monte Carlo simulation with 2000 runs was then used to compare public-cryptocurrency-linked settlement with the proposed permissioned DeFi-based settlement environment. Results: The empirical analysis showed substantial cryptocurrency volatility, with annual declines of 12.52% for Ether, 23.57% for Bitcoin, 41.81% for Solana, and 38.29% for XRP. The simulation further showed that public-cryptocurrency-linked settlement can create considerable variation in realized payment value across supply-chain tiers. In contrast, the proposed DeFi model provides a stable internal settlement benchmark by insulating intra-supply-chain transactions from public-crypto repricing. Conclusions: The study demonstrates that a self-governed, permissioned DeFi architecture with managed token-to-fiat convertibility can improve supply-chain cash flow stability, reduce dependence on external blockchain infrastructure, and strengthen financial resilience in multi-tier supply-chain networks.

Suggested Citation

  • Nidhin SREEDAS E & V. Madhusudanan PILLAI & Hiran V. NATH, 2026. "Decentralized finance for supply chain cash-flow: token-to-fiat currency exchange model," Access Journal, Access Press Publishing House, vol. 7(3), pages 565-587, June.
    • Handle: RePEc:aip:access:v:7:y:2026:i:3:p:565-587
    DOI: 10.46656/access.2026.7.3(5)
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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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