Spanish banking giant Santander announced it will offer tokenized supported loans backed by agricultural commodities in Argentina.
The Spanish multinational announced its partnership with startup Agrotoken in a blog post on March 7.
Soybean, wheat, and corn tokens are used to secure the loans.
Agrotoken represents a ton of grain as a stablecoin.
Corn, soy, and wheat fall under this category. Token values are based on the price of commodities in US dollars. In order to validate the product, Santander states that a pilot project has already been conducted with producers in Argentina.
In February, Matba Rofex, an Argentinian stock exchange, listed SOYA, CORA and WHEA tokens. A bank like Santander would be unable to work with the tokens if they weren't listed.
According to Agrotoken, the platform is built on Ethereum, Polygon, and Algorithm.
Santander posted on its blog that each ton of grain is validated using the PoGR, or "Proof of Grain Reserve."
Using oracles, 2020 Agrotoken's whitepaper describes how agricultural producers can generate a POGR certificate that is used to create cryptograins that can be deposited in a wallet. These tokens can be traded on exchanges, Defi apps, and marketplaces.
The website of agricultural tokens notes that farmers can use them to buy seeds, machinery, fuel, or to get pre-funded credit cards.
In November, Santander announced it would invest $225 million in Argentina over the next three years.