Brazilian farmers bring harvests to the digital world with “tokens”
Miami, May 10 (EFE) – Farmers in Brazil can now harness blockchain technology and the digital market to “tokenize their crops” and diversify their trade through an initiative aimed at small and medium-sized businesses.
The programmable financial platform, powered by Visa, is in its exploratory phase, allowing small farmers to securely finance and sell their harvests using blockchain technology.
This tool provides farmers “the possibility to access affordable alternative finance by leveraging technology,” the head of Cryptocurrency Solutions at Visa Latin America and the Caribbean, Catalina Tobar Gómez, told EFE.
The project is the result of research conducted by this digital payments firm (with more than 15 million points worldwide) for the Central Bank of Brazil’s (BCB) LIFT Challenge initiative, which explores relevant and innovative use cases for the digital Real, the country’s fiat currency in digital format.
“(The platform) is an end-to-end use case, where it mainly demonstrates how decentralized finance can generate opportunities for a very relevant group with specific needs, which are farmers in this case,” Tobar said.
A HARVEST IN TOKEN FORM
The platform allows farmers to bring their harvests to the digital world in the form of a Non-Fungible Token (NFT), which it can be auctioned off in an open and international financing auction or purchased with USD Coin, a stable digital currency pegged to the U.S. dollar.
The project, one of nine finalists in the LIFT Challenge, was developed in partnership with Agrotoken, an Argentine startup that is the first company in the world to create fungible tokens from agricultural products, as well as with Microsoft and Sinqia.
The platform uses a Visa technology called Universal Payment Channel (UPC), which can interconnect between the future digital Real, which Brazil plans to launch as a currency in 2024, and other central bank-backed currencies, as well as with “stable cryptocurrencies or tokenized deposits,” according to a press release.
PRELIMINARY INTEREST FROM “RELEVANT PLAYERS”
The initiative “has received a very good response and preliminary interest from relevant players in the ecosystem,” Tobar said, highlighting Visa’s partnership with Agrotoken, which has projects in Argentina and Brazil.
Agrotoken’s platform offers an ecosystem that allows farmers to convert their production into digital assets (tokens) that can be stored or exchanged for supplies, services, or other assets.
Another aspect of the project relates to the future digital Real, which is a Central Bank Digital Currency (CBDC), and is being piloted in 2023 in some institutions. As such, it is stable and instills confidence, as it adheres to Brazil’s monetary policy.
In this regard, the company is having “open discussions” with the central banks of Hong Kong and Singapore, Tobar said.
The executive pointed out that central banks worldwide are not strangers to exploring digital currencies, and in fact, 90% of them are evaluating or experimenting with them.
AN ALTERNATIVE TO INFLATIONARY TRENDS
A recent Visa study on consumer attitudes and uses of cryptocurrencies, which surveyed 8,000 participants from eight different markets, including two from Latin America, revealed that 95% have a “widespread notion” of digital assets.
Tobar noted that the survey showed that adoption levels of cryptocurrencies in emerging markets are higher than those in developed markets, a relevant finding for Latin America and the Caribbean, where the involvement of established financial institutions has likely been a contributing factor.
Another element has been “the search for alternatives to protect against certain inflationary trends that exist in our markets,” Tobar said. EFE
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