Spanish banking multinational Santander has launched loans in Argentina collateralized with tokenized commodities, the bank told CoinDesk on Monday.

During a trial period in February, Santander already delivered loans to Argentine farmers in conjunction with Agrotoken, an Argentina-based agricultural commodities tokenization platform.

"This is the first time a financial services platform has used blockchain technology and crypto assets to expand the agricultural credit market and unlock farmers’ business potential," Fernando Bautista, head of agribusiness at Santander Argentina, said in a statement.

Agrotoken expects that over the next six months, 1,000 Argentine farmers will receive Santander credits collateralized with tokens based on soybeans (SOYA), corn (CORA) and wheat (WHEA) launched by Agrotoken, the company’s co-founder and chief technology officer, Ariel Scaliter, told CoinDesk.

Agrotoken began working with Santander seven months ago, with the project involving both the bank's local team and its global blockchain division.

Santander and Agrotoken plan to offer the crypto-backed loans in Brazil in June, and in the U.S. in late 2022, Scaliter said, noting that the three countries together comprise 70% of global wheat, corn and soybean production.

According to Agrotoken, each token corresponds to a ton of grain that the farmer has sold and delivered to a grain elevator, which is then validated through a proof of grain reserve test (PoGR).

After a farmer requests a loan from Santander, the bank will confirm on a platform developed in partnership with Agrotoken whether the farmer complies with the conditions to receive the money.

Once the loan is approved, tokens will be sent to an escrow, which is a third-party smart contract, until the credit is repaid with fiat or tokens, Scaliter said. If a farmer repays the loan with tokens, Santander will automatically convert them to Argentine pesos on the Agrotoken platform, Scaliter said.

The SOYA, CORA and WHEA tokens were initially listed in February on Matba Rofex, an Argentinian stock exchange. "If the tokens were not listed, a bank like Santander would not be able to operate with them," Scaliter said.

On March 9, Santander and Agrotoken will officially launch the initiative at Expoagro, Argentina's biggest agribusiness event.

In December, Agrotoken raised a $5 million seed round led by Xperiment VC, according to Scaliter.