As announced on Monday, the Spanish banking multinational Santander Argentina partnered with Agrotoken to provide a token-backed lending service.
Agrotoken is an Argentina-based agricultural commodities tokenization platform. It is also the first global infrastructure for the tokenization of agro commodities.
The partnership will allow farmers to take out loans backed by Agrotoken’s commodity tokens. Some of these include soybeans (SOYA), corn (CORA), and wheat (WHEA).
According to Santander, these tokens will allow farmers and the agroecosystem to have easy and fluid access to a new financing system. Moreover, they will expand farmers’ credit capacity by using tokenized grains.
$225 Million Investment in Argentina
The pilot project will be tested in Argentina, where the group will invest $225 million. Santander Group President Ana Botín announced the investment back near the end of 2021 before disclosing what it was for.
Head of Agribusiness at Santander Argentina, Fernando Bautista, said the tech demonstrates new opportunities in the agriculture business.
“We rely on technology and innovation to generate new business solutions that make life easier and expand opportunities for agricultural producers.”
Co-Founder & CEO of Agrotoken Eduardo Novillo Astrada also weighed in:
“This is the first world experience that supports loans with tokens based on agricultural commodities, such as soybeans, corn, and wheat.”
They asserted that blockchain technology will make storing agricultural products more efficient. It is also the first guarantee from crypto assets based on agricultural products.
How it Works
According to Agrotoken, for each token, there is a ton of grain delivered in a store that supports it. Users can tokenize their grains online and receive the Agrotokens in their digital wallets.
Farmers can store these tokens in their digital wallets, accessible both on PC and mobile. Moreover, they can exchange them for seeds, vehicles, machinery, fuel, services, and more. Now, they can also use them as collateral for loans.
The system validates every ton with a PoGR (“Proof of Grain Reserve”) network. PoGR is advertised as a transparent, secure, and decentralized system. It has a multichain infrastructure that uses the technology of several networks. For example, it can use Ethereum, Polygon, and Algorand, depending on the optimal use cases for each.
Tokenized commodities are not new in the crypto space. In 2021, SWIFT came out with plans to explore tokenized securities, including commodities.
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
Credit: Source link
