Santander to begin issuing loans secured by tokenized agricultural commodities

The Santander banking group запускает a lending program for local farmers in Argentina based on tokenized agricultural commodities.

The project is being implemented in partnership with the local startup Agrotoken.

“This is the first in the world experience of securing loans with tokenized assets based on agricultural commodities such as soybeans, corn and wheat,” said Agrotoken CEO Novillo Astrada.

Each token SOYA, CORA and WHEA corresponds to a metric ton of grain that the farmer sold and delivered to the elevator. The process is verified by the PoGR system. The asset price is determined by indices provided by Grupo Matba Rofex.

Loan requests are made through a blockchain platform developed jointly by Santander and Agrotoken. The startup noted that the infrastructure uses Ethereum, Polygon and Algorand networks depending on current conditions.

When the bank disburses funds, the collateral tokens are placed in an escrow account until repayment of the loan.

Farmers will also be able to use the digital assets in DeFi services and on trading platforms that add support for them.

Agrotoken noted other potential uses for the tokens, including exchanges for seeds, fuel or equipment.

The launch of Santander’s lending program was preceded by a lengthy phase of pilot testing to verify the product’s technical and operational viability, the bank said.

In 2019, Santander began using a Ripple-based solution to create a payments corridor between Latin America and the United States. The bank later expanded the initiative to Mexico.

Santander has also successfully tested the issuance of tokenized bonds.