Cerealia SA pilots a project to trade grains using virtual tokens
- The pilot involved the tokenization of 30,000 metric tonnes of Mexican white corn by Mercanta.
- Per Cerealia, tokenization helps reduce the paperwork and costs of over-the-counter transactions.
- Cerealia’s COO believes that through tokenization the grain business will attract banks and investors.
Cerealia SA, a Swiss-based crop-trading blockchain firm, has tested the use of technology that facilitates the trading of grain with virtual tokens. A report unveiled this news on March 31, noting that the startup developed a non-fungible token (NFT) that is backed by 30,000 metric tonnes of white corn from Mexico. Reportedly, Mercanta issued the token to represent grain stowed at the Triple T terminal.
According to the report, this pilot found that token deals have the potential to rid the grain business of paperwork and costs incurred while making transactions over the counter. To help streamline transactions, trade houses and grain holders can issue tokens for their supply. These tokens would be tradeable on Cerealia’s blockchain-powered platform thus eliminating the need for physical documents, which support the majority of commodity deals to date.
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Explaining how this disruption would help shape the future of grain trade, Cerealia’s COO, Filipe Pohlmann Gonzaga said the token is easily tradeable. He added that it would let other players, including hedge funds, banks, and investors take part in the grain trade space.
A rapidly growing platform
This news comes after Cerealia launched in November last year. Since then, the platform has handled 6 million tonnes of grain. At launch, the platform was only active in the Black Sea region. However, it has branched out to cover a wider market base, which included Brazil, Ukraine, and Egypt. According to the company’s CEO, Andrei Grigorov, Cerealia has a presence in nearly 30 countries and this Mexican deal will see it expand further. Reportedly, the firm’s next expansion targets Singapore and sub-Saharan African countries.
While the startup only supports bilateral transactions between cereal dealers at the moment, it aims to roll out a system that enables third parties such as financial institutions and speculators to enter the market without taking part in the physical delivery of grain.
Explaining how tokenization would help the agribusiness sector, the company said it would let grain holders trade seamlessly by posting their commodities in an efficient and liquid way. On top of this, Cerealia said the public trading of such tokens would introduce accurate, local price discovery.