Wednesday, December 8

Bitcoin for grains and bonds: a new way to “dollarize” in Argentina

Key facts:
  • Fidustrade accepts pesos, dollars, bonds, and grain settlement to buy bitcoin.

  • The platform also offers decentralized finance services to boost your savings.

Fidustrade, an Argentine business management company for third parties that specializes in decentralized finance, offers the possibility of exchanging cryptocurrencies for bonds issued by financial entities in the country. In addition, it also provides an alternative for agricultural producers to get a higher yield from their crops through bitcoin (BTC) and other cryptocurrencies.

An exchange of bonds for bitcoin is offered on the company’s website “in a very simple way and avoiding operating expenses.” This was also explained by Juan Pablo Accorinti, the founder and COO of the company, to CriptoNoticias.

The first alternative mentioned, the exchange of bonds for bitcoin, does not have too many complications: an investor who owns Argentine bonds can sell them to Fidustrade and receive cryptocurrencies in exchange.

According to a Article posted on the Fidustrade blog, bonds are not performing well and they fell again to very low prices. Specifically, these went from being worth around USD 50 each to trading around USD 30 per bond.

On the contrary, bitcoin has had a 15% increase in its price in the last 30 days. In accordance with CoinMarketCap data, the main cryptocurrency appreciated from USD 56,300 to USD 64,700 at the close of this note, although in the middle it also had its historical maximum price of USD 69,044 on November 10.

Bitcoin for the Argentine countryside

On the other hand, Fidustrade also offers an alternative so that agricultural producers can liquidate their production and receive cryptocurrencies. According to Accorinti told this medium, the company receives pesos from the sale of grains (wheat, soybeans and corn, three of the main grains produced in the country) and exchanges them for bitcoin (BTC).

With the weights from the grain settlement, framed within the exchange, you can resort to Fidustrade to dollarize your earnings through cryptocurrencies, with the benefit of avoiding in this way the VAT withholding (value added tax) or the withholding of the Income tax that would be applied in the traditional process.

This is because, since cryptocurrencies are a digital asset for the country’s legislation, the operation It is framed as an exchange of grains for goods or products. The difference is that, instead of receiving inputs, equipment or machinery, the producer receives crypto assets that, in turn, open the door to other ways of obtaining returns.

In addition, this option is also a way to avoid the limit of USD 200 for the purchase of dollars imposed by the foreign exchange stocks in the country.

According to the Fidustrade site, a crop can yield more operating on the platform than in traditional markets. Source: Fidustrade.

A possibility to “dollarize” in Argentina

In Argentina, there is an exchange rate established by the government that determines that each person can buy only USD 200 per month for hoarding. Therefore, accessing this foreign currency as a way to protect against the devaluation of the Argentine peso is very complicated.

However, this is something that can be achieved through cryptocurrencies, as this medium has reported on several occasions. Some of them, such as tether (USDT), USD Coin (USDC) and DAI are called stablecoins or stable cryptocurrencies, since their value always remains tied to the price of the US dollar.

In this way, those who sell their bonds or grains can access assets that, in addition to not having a purchase limit as occurs with fiduciary money (the greenback of the dollar), does not impose restrictions on the times of purchase and sale. This does happen with bonds, which usually have a parking period that must be met before operating with them.

Likewise, in the Fidusswap section of the platform you can also access the option of investing pesos or dollars for the purchase of stablecoins. When these cryptocurrencies are sold, the investment is returned in pesos, they detail, so it also represents an alternative for those who want to make this type of investment simply by depositing the local currency.

Decentralized finance, the next step

The cryptocurrencies that the user buys in Fidustrade are sent to their personal wallet, although there is also the option of leaving them in the custody of the company to access other services.

Once he has the cryptocurrencies in his possession, the user can in turn swap for stablecoins or enter decentralized finance (DeFi). These protocols include investments with a fixed annual return (similar to the fixed term in traditional finance), very cheap credits leaving bitcoin as collateral and trading bots.

The latter are automated programs that operate cryptocurrencies to profit from price fluctuations. In the case of Fidustrade, the bot was developed by the company itself, which also offers other banking-type services, as a payment processor and as an investment broker in cryptocurrency exchanges.

Finally, the balance obtained from the sale of cryptocurrencies can be withdrawn through a bank account, both in Argentine pesos and in dollars.

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