Santander, a multinational Spanish bank, has announced that it will issue loans in Argentina secured by agricultural commodities-based cryptocurrency.
Santander has teamed with Agrotoken to provide these loans to the agriculture sector. The Ethereum, Algorand, and Polygon networks will be used to build the infrastructure.
How does Santander’s new collaboration work?
Each token will represent a ton of grain that has been stored. SOYA will stand for soy, CORA will stand for corn, and WHEA will stand for wheat. According to Reuters, Argentina’s inflation hit a nine-month high in January. The commodity’s price will determine the new tokens’ value in US dollars.
Farmers may save these tokens in their digital wallets, available on both PC and mobile devices. They may also trade them for crops, automobiles, machinery, gasoline, services, and other items. They may now use them as a kind of collateral for loans.
Every ton is verified via a PoGR (“Proof of Grain Reserve”) network. PoGR is marketed as a decentralized, transparent, and secure system. It has a multichain infrastructure that makes use of several networks technologies.
Argentina will be the testbed for the experimental project, totaling $225 million. Ana Botn, President of the Santander Group, announced the investment at the end of 2021 but did not say what it was for.
Fernando Bautista, Santander Argentina’s Head of Agribusiness, said the technology reveals new prospects in the agriculture industry.
“We rely on technology and creativity to develop innovative business solutions that make life simpler for agricultural farmers and broaden their potential.”
Eduardo Novillo Astrada, co-founder and CEO of Agrotoken, added his two cents:
“This is the first time in the world that agricultural commodities such as soybeans, corn, and wheat have been used to back loans.”
They said that blockchain technology would improve the efficiency of agricultural produce storage. It’s also the first time crypto assets based on farm products have been guaranteed.
This decision indeed is an excellent initiative by Santander, which will help out many farmers. Implementing blockchain technology is one way to ease and fasten up various processes. It also leads to global adoption and growth.
