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Santander will offer grain-based crypto tokens as collateral for loans


Santander, a financial services business, has announced that it will offer a new sort of loan in Argentina, secured by agricultural commodity tokens.

The Spanish giant announced a partnership with startup Agrotoken to provide loans for the agriculture industry in a blog post on March 7th. The loans are secured by grain tokens such as soy, wheat, and maize.

Stablecoins from Agrotoken represent a ton of grain that has been stored. Soy (SOYA), corn (CORA), and wheat are among them (WHEA). The value of each token is determined by the price of each commodity in US dollars. According to Santander, the company has already completed a pilot project with producers in Argentina to evaluate the product.

Agrotoken boasts a “multichain infrastructure” with a platform based on Ethereum, Polygon, and Algorand, according to the company.

Each ton of grain is confirmed by a mechanism known as the PoGR, or “Proof of Grain Reserve,” according to Santander’s blog post. A whitepaper published by 2020 Agrotoken explains how agricultural producers can use oracles to construct a PoGR certificate that serves as collateral for their “cryptograins.” These tokens are then created and placed into the producer’s wallet, with the intention of making them available on any exchanges, DeFi apps, or marketplaces that support them.

On its website, Agrotoken lists numerous alternative ways farmers can utilize the tokens, including swapping them for seeds, machinery, and fuel, or receiving a pre-funded credit card.

In November, Santander stated that it would invest $225 million in Argentina over three years. According to Reuters, based on January numbers, inflation in the South American country just reached a nine-month high.
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