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Santander to offer loans secured by grain-based crypto tokens

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Santander to offer loans secured by grain-based crypto tokens

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Financial services company Santander said it will offer a new type of loan in Argentina, backed by tokens based on agricultural commodities. 

In a March 7 blog post, the Spanish multinational said it was partnering with startup Agrotoken to offer loans for the agricultural sector. The loans are backed by tokens tied to grains like soy, wheat and corn.

Agrotoken offers stablecoins that each represent a ton of stored grain. These include soy (SOYA), corn (CORA) and wheat (WHEA). Each token’s value is pegged to the price of each commodity in US dollars. The firm has already undergone a pilot project with producers in Argentina to validate the product, Santander said. 

Agrotoken says it has a “multichain infrastructure,” with a platform built on Ethereum, Polygon and Algorand. 

According to Santander’s blog post, each ton of grain is validated through a system called the PoGR, or “Proof of Grain Reserve.” A 2020 Agrotoken whitepaper describes how agricultural producers can use oracles to create a PoGR certificate, which is used as collateral for their so-called “cryptograins.” These tokens are then minted and deposited into the producer’s wallet, with the idea of making them available on any exchanges, DeFi apps and marketplaces supporting them. 

Agrotoken notes several other ways farmers could use the tokens on its website, including exchanging them for things like seeds, machinery and fuel, or getting a pre-funded credit card. 

Santander announced in November that it would invest $225 million in Argentina over a three-year period. According to Reuters, inflation in the South American country recently reached a nine-month high based on January figures.

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Source – Theblockcrypto.com

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