Digital commodity prices will be tied to the price of agricultural commodities, such as soy (SOYA), corn (CORA) and wheat (WHEA) on a US dollar basis. These digital tokens can be held or exchanged for inputs, services and other goods.
"The digital solution will allow farmers and the agro-ecosystem to have easy and seamless access to a new financing system, expanding credit capacity, using tokenized grains," the financial institution explained in a statement. .
Each token is backed by a ton of grain delivered to a warehouse. Furthermore, all tons are also validated through a PoGR (Proof of Grain Reserve).
Santander says PoGR is a system that is "transparent, secure, decentralized and verifiable at all times through a multi-chain security infrastructure using Ethereum, Polygon and Algorand technology, depending on the optimal use cases for each" .
To access the tokens, the producer delivers the wheat as a back-up and then, via online tokenization, receives the Agrotokens in his wallet. They will be able to trade them for other seeds, vehicles, machinery and fuel.
You can also use them as a loan guarantee, as well as apply for a pre-financed card with your Agrotokens.
Although both companies have not given a date for the launch of the initiative, they have confirmed that they have carried out pilot tests with Argentine producers to technically and operationally validate the operation of the project.
This is the first experience in the world that supports token loans based on agricultural commodities, such as soy, corn and wheat. Together with Santander, we are co-creating several financial products to provide farmers with a service that allows them to easily and seamlessly access a new credit system backed by their grains - Eduardo Novillo Astrada, CEO of Agrotoken.
Agrotoken of Argentina has gained momentum to develop tokens for the agricultural sector, thanks in large part to the Investors who have put their trust in the initiative.
In total, Agrotoken received $ 5 million in 2021 for being one of the companies aimed at directly serving consumers or companies in the business-to-business (B2B) area.
This figure is reflected in the annual report of the Latin American Private Investment Association (LAVCA), which showed significant growth in venture capital directed to companies in the region.
Total investment nearly quadrupled from 2020 to 2021, while investments in bitcoin and other cryptocurrencies, decentralized finance (DeFi) and blockchain companies all increased tenfold over the same period.
Total financing of venture capital projects in the subcontinent increased from $ 4,143 billion in 2020 to $ 15,736 billion in 2021, with an annual growth of 279%.
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