Qupital, a Hong Kong-based fintech company specializing in cross-border e-commerce trade finance, has launched an AI-driven on-chain lending protocol designed to automate financing for global online merchants and connect traditional trade credit with blockchain infrastructure.

According to the company, the new protocol combines smart contracts — self-executing programs deployed on a blockchain — artificial intelligence, and payment gateway integrations to move day-to-day lending operations into an automated framework. The system is intended to improve transparency, accelerate settlement, and give merchants access to liquidity around the clock.

The protocol uses Ethereum smart contracts and USDC, a stablecoin designed to hold a US dollar peg, to provide e-commerce merchants with automated access to trade financing, while an AI-based credit monitoring system continuously evaluates business performance and adjusts risk exposure.

AI Credit Monitoring Meets On-Chain Execution

The protocol is built around dynamic credit monitoring that evaluates real-time sales and loan performance. Rather than relying solely on periodic manual assessments, the system is designed to continuously track merchant activity and identify changes that could affect repayment capacity.

When a merchant's store performance moves outside predetermined parameters, smart contracts can automatically trigger connected payment gateway APIs. These systems can intercept settlement cash flows and redirect merchant revenue toward outstanding debt obligations and agreed revenue targets.

The design combines Qupital's proprietary AI risk engine with on-chain execution, allowing credit decisions and payment controls to operate with less manual intervention. The company said this could reduce delays in financing administration while helping lenders respond more quickly to shifts in merchant performance.

USDC Provides 24/7 Liquidity

Qupital is deploying USDC through Ethereum-based smart contracts to provide financing directly to eligible e-commerce businesses. The company said the system is designed to complement conventional banking channels rather than immediately replace them.

The blockchain-based infrastructure is intended to make liquidity available continuously, allowing financing operations to run independently of traditional banking hours and reducing delays associated with manual loan drawdowns and settlement procedures.

Smart contracts also automate parts of the back-office process, including loan execution and settlement. By reducing the need for manual verification and repeated settlement instructions, Qupital expects to increase capital turnover while lowering operational costs.

The protocol additionally tokenizes active loans on Qupital's Treasury Vault — representing them as on-chain digital records — giving institutional lenders and partners real-time, 1:1 visibility into loan balances and supporting greater transparency and auditability.

Targeting a Multi-Trillion-Dollar Settlement Market

The launch comes as stablecoins — blockchain tokens pegged to fiat currencies such as the US dollar — draw greater attention as a potential settlement mechanism for international business transactions. Qupital cited projections that business-to-business cross-border stablecoin settlements could reach $5 trillion by 2035, while more than half of cross-border enterprises are expected to prepare for stablecoin payment infrastructure.

The company views this shift as an opportunity to modernize trade finance for e-commerce businesses operating across multiple markets. By combining digital settlement with automated lending controls, the protocol is designed to address the financing needs of merchants that may face limitations when relying exclusively on traditional financial institutions.

Backed by HSBC, MUFG and Alibaba

Qupital has processed more than $9.5 billion in cumulative trade financing and positions itself as a data-driven lender serving digital businesses. Its customers include e-commerce merchants operating on major global marketplaces such as Amazon, JD.com, Tmall, TikTok Shop and Pinduoduo.

The company has previously securitized e-commerce merchant loans and has attracted backing from financial institutions and strategic investors, including HSBC, MUFG, Alibaba and other investment groups.

$100 Million Pipeline Planned for On-Chain Financing

Winston Wong, Qupital's chief executive and co-founder, said the company views blockchain infrastructure as a way to streamline financing distribution and settlement while retaining traditional banking channels as an important part of its broader trade finance operations. He indicated that combining the firm's AI risk engine with on-chain execution could reduce operational friction and improve credit management.

Qupital already has an active pipeline of about $100 million in financing planned for on-chain fulfillment, marking a significant expansion of its blockchain-based trade finance operations.

The launch follows the company's recent Series C financing and forms part of its broader international expansion strategy. Moving trade assets onto blockchain infrastructure could give Qupital additional options for deploying capital while extending its reach into new markets.

The company is positioning the protocol at the intersection of decentralized finance and real-world assets — a term for traditional financial instruments such as loans that are represented as tokens on blockchains — aiming to bring established trade-finance assets into a programmable digital environment.

The initiative could offer a new financing model for small and medium-sized digital enterprises that have historically struggled to obtain sufficient working capital from conventional banks. By combining AI-based risk controls, smart-contract automation, stablecoin settlement, and on-chain transparency, Qupital is seeking to make cross-border e-commerce faster and more accessible.