Farmers struggling amid Argentina’s hyperinflation and the economic effects of the coronavirus pandemic may soon find relief through the tokenization of agricultural assets using blockchain technology.
According to a press release on Thursday, blockchain infrastructure provider CoreLedger and soon-to-launch peer-to-peer marketplace Abakus are aiming to create a digital barter economy within the country.
CoreLedger’s technology is expected to allow farmers to redeem and trade their tokenized farming assets with any other tokenized asset on the Abakus platform.
For example, soybeans would work like an asset-backed currency to be traded for cattle, corn or the Argentine peso, according to the press release. Assets on Abakus will also be available to both national and international investors.
“In an inflation-stricken country, access to physically backed assets can be the difference between surviving and thriving for these farmers,” said CoreLedger’s CEO Johannes Schweifer.
Schweifer also said 40% of the world’s soybean oil and soybean meal production comes from Argentina and that the initiative is of “great national interest” to small farmers seeking to liquify their assets.
Argentina has struggled with hyperinflation since as early as the 1980’s, compounded by foreign debt, excessive government spending and a recession that continues to plague the Latin American nation.
“Farmers in Argentina struggle to make a living due to the stronghold monopolies of national corporations who dictate the conditions for agricultural trade and take a major cut,” said Abakus CEO Martin Furst. “Agricultural-backed tokens solve volatility and liquidity issues inherent in cash and stock-based saving plans.”
A previous CoreLedger initiative in Bolivia enabled farmers to sell tokenized cattle to investors abroad which opening an avenue to circumvent loss of revenue to middlemen.