Santander Explores Crypto-backed Loans For Argentina’s Agricultural Sector

Cryptocurrencies can play a crucial role in the finance industry. Institutional interest in Bitcoin and Ethereum grows, opening up new opportunities. Santander and Agrotoken will develop farmer-oriented loans in Argentina secured by crypto assets. 

Crypto Tokens For Agriculture

It is interesting to see how different organizations want to leverage the potential of crypto assets. Santander, one of the world’s biggest banks, explores new opportunities in agriculture. More specifically, the bank is developing loans for Argentinian farmers secured by tokens related to agriculture products. A slightly risky endeavor, although one that can make a significant difference.

Santander and Agrotoken have completed a trial with local producers. Participants could access finance against corn, soya beans, and wheat. A slightly unusual approach, although one that provides viable solutions. Every token represents one tonne of grain sold and delivered by the farmer. 

Under the hood, every transaction is validated through the Proof of Grain Reserve certificate. That system is transparent, decentralized, and can be audted by third parties. Agrotokens are viable to use for various transactions. However, one must consider the three price indices reflect the real-time value of corn, soya beans, and wheat. Their value, like any other asset, fluctuates over time. 

It is unclear what will happen now that the trial has been completed. Financial service providers tend to shy away from blockchain and crypto assets first and foremost, yet Santander breaks that streak. Moreover, the agricultural credit market provides tremendous potential that may require a slightly different approach.