Santander Launches Loans Backed by Tokenized Commodities Such as Soy and Corn

The Spanish banking multinational has partnered with Agrotoken, an agricultural commodities tokenization platform, to offer the loans.

AccessTimeIconMar 7, 2022 at 7:39 p.m. UTC
Updated Mar 7, 2022 at 7:55 p.m. UTC

Andrés Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC and ETH.

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.

How it works

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.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Andrés Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC and ETH.

CoinDesk - Unknown

Andrés Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC and ETH.

Trending

1
CoinDesk - Unknown
First Mover Asia: Bitcoin Rebounds Past $20K; China’s Blockchain Revolution Is Missing On-Chain Data

Ether and most other major altcoins regain ground they'd lost in last week's downturn; China companies seem unconvinced by blockchain technology.

CoinDesk - Unknown
2
CoinDesk - Unknown
NFT Platforms Should Be Caught by EU Money-Laundering Overhaul, Lawmakers Say

Unhosted wallets and decentralized finance were left largely unscathed by two landmark crypto laws agreed to last week, but left-wing lawmakers may seek another go as they discuss dirty-money rules.

CoinDesk - Unknown
3
CoinDesk - Unknown
Bitcoin se recupera y supera los $19K; Nomura advierte de una recesión en EE. UU. y Reino Unido

Nomura escribió acerca de una recesión en la eurozona, el Reino Unido y Asia Pacífico, lo que podría influir en los precios de las criptomonedas.

CoinDesk - Unknown
4
CoinDesk - Unknown
Argentinos se refugian en stablecoins durante el fin de semana tras dimisión del ministro de Economía

Los principales exchanges del país informaron que los usuarios compraron hasta tres veces más criptomonedas estables que durante un fin de semana normal, en medio una crisis económica en ciernes.

CoinDesk - Unknown