Last month we got into the topic of NFTs, what they are, how they are looking for the future, amongst a number of other things, one of which was how they could come to be commonplace in Latin America. Well, this month we are jumping back on board with this theme to share some interesting prospects for the use of NFTs in Argentina, and specifically agroindustry, one of the biggest sectors of the economy.
What is an NFT?
Just in case you missed any of our other articles, this is just a quick refresher to make sure you don’t get lost along the way! So, it is easy to become distracted by the numbers when discussing NFTs, but as we always say, context is key, so first let’s unpack what they are.
Literally, NFT is the acronym for a Non-Fungible Token, a unique digital asset which can be traded, but in exchange for cryptocurrency and not an identical copy. It is the uniqueness of these assets which give each one an independent monetary value, explaining how the collectable nature of these tokens has become so popular.
Where does Argentine agroindustry come into this?
For us to understand this, it’s important to know some of the ways NFTs are being incorporated into the industry globally. You’re probably familiar with the idea that these tokens can be used to represent things that exist physically, like a house or ticket, but with this logic, areas of land can be too, right? It’s been seen that by breaking agricultural land down into individual acres, and attributing an NFT to each one, could well lead to a more sustainable future.
Why would this be useful in Argentina I hear you ask? Well, with
investment needed following the pandemic, and schemes already on offer which grant
residency in return for investment, this innovative thinking could be what’s needed to get
foreign investors excited about agroindustry in Latin America.
Let’s put the Argentine agriculture market into some context here, in terms of global exports, Argentina produces over 40% of soybean and soymeal supplies, a pretty huge figure which, given the economic instability, is worrying. This is because global reliance can’t be sustained if there is no one to grow or export the produce. What’s the solution? Well, by using NFTs and other cryptoassets to deal with economic processes associated with agroindustry, the Argentine peso doesn’t play such a big role in the overall chain of events and means capital can be stored in backup ways.
The final example we must share is a little different, and it involves wine and beef, two things any investor looking to get involved in Argentina will surely become very familiar with.
The Latin American nation is world renowned for its beef and vineyards, and as we mentioned before, NFTs can be used to represent real assets, and so Bodega Costaflores, for example, put codes on their bottles which lead to an opportunity to provide some feedback and in return get a unique NFT, incentivising the purchasing of their products.
Yes, this isn’t the kind of investment that will get you residency in Argentina, but it is worth noting the scale of NFT projects covering the whole spectrum. The same applies to the cows, they can each have an NFT, like the acres of land, which makes them easier to keep an eye on during a supply chain and have their information within reach at all times.
So, if you are interested in finding out more, contact us today! Below this article you will find a link to set up a free fifteen-minute consultation with us to discuss your options further. Also, if you want to access our other great content, subscribe to our YouTube channel! At Creimerman, our team of professional global citizens would be happy to help you with your personal or professional cross-border ventures and help make them a success.