Financial giant Santander will offer loans to the agricultural sector in Argentina, backed by the firm's Agrotoken cryptoasset.
In a statement issued by both companies, the entities assured that the solution will allow farmers to have "easy and fluid access" to a new financing system.
In this way, the Santander Group will also increase its investment in Agrotoken's technology, with an investment of close to $225 million in Argentina, as announced by Ana Botín, president of Santander, during her visit to Argentina.
"This is the first time that a financial services platform uses blockchain technology and cryptoassets to expand the agricultural credit market and unlock the producer's business potential," said Fernando Bautista, head of Agribusiness at Santander Argentina.
The cryptoassets developed by the company Agrotoken allow the purchase of agricultural resources, machinery and other goods, but, after the implementation of the agreement with Santander, they will also become a guarantee to apply for loans.
"It is the first experience worldwide that supports loans with tokens based on agricultural commodities, such as soybeans, corn and wheat," said Eduardo Novillo Astrada, CEO and co-founder of Agrotoken.
The Agrotoken entity emerged in late 2020, through the development of a stablecoin (stable cryptocurrency) that is backed by grain. The company is the creator of crypto-soybean (SOYA), crypto-corn (CORA) and crypto-wheat (WHEA), the first grain-backed cryptoassets.
The functioning of these cryptocurrencies is based on the fact that, for each token, there is a tonne of grain that a producer has sold to a grain collector. The control of these movements is recorded in a PoGR (Proof of Grain Reserve), a transparent, secure, decentralised and auditable system at any time.
The price of the agrotokens is obtained by looking at the three price indices set in conjunction with the Matba Rofex Group, and which are related to the value of the grain. With the agrotokens, producers can purchase other goods, trucks and machinery, among others.
Agrotoken and Santander have already carried out a pilot test among some Argentinean producers, so that their bet has been technically and operationally validated as a new financial product in the agricultural sector.
Coordinator for the Americas: José Antonio Sierra.