Farmers struggling under Argentina’s hyperinflation and the economic impact of the coronavirus pandemic could soon find relief from tokenizing agricultural assets using blockchain technology.
According to a press release on Thursday, the blockchain infrastructure provider CoreLedger and the soon-to-be-launched peer-to-peer marketplace Abakus want to create a digital exchange economy in the country.
CoreLedger technology is expected to enable farmers to redeem and trade their tokenized agricultural assets with all other tokenized assets on the Abakus platform.
According to the press release, soybeans would function like an asset-backed currency that is traded for cattle, corn or the Argentine peso. Assets on Abakus will also be available to national and international investors.
“In an inflation-hit country, access to physically secured assets for these farmers can mean the difference between survival and success,” said Johannes Schweifer, CEO of CoreLedger.
Schweifer also said that 40% of the world’s soybean oil and soybean meal production comes from Argentina and that the initiative is of “great national interest” for smallholders looking to liquefy their wealth.
Argentina struggled with hyperinflation as early as the 1980s, compounded by external debt, excessive government spending, and a recession that continues to plague the Latin American nation.
“Argentine farmers are struggling to make a living because of the strong monopoly of national companies that set the conditions for agricultural trade and make a significant cut,” said Martin Furst, CEO of Abakus. “Agriculture-backed tokens solve volatility and liquidity problems associated with cash and stock-based savings plans.”
A previous CoreLedger initiative in Bolivia enabled farmers to sell tokenized cattle to investors overseas, opening up a way to bypass lost revenue for middlemen.