Coffee farmers in Brazil could soon start enjoying the benefits that come with crypto. According to a new report, Brazilian coffee farming cooperative Minasul plans on issuing a blockchain-based digital currency later this month.
Minasul’s president, Jose Marcos Magalhaes revealed the company’s plan recently, a report by Bloomberg revealed. Speaking in an interview during the Global Coffee Forum in Sao Paulo, Magalhaes said that the token will be backed by coffee supplies. The farmers will then be able to purchase farm supplies including fertilizer and farm machinery using the token.
The farmers can also use the token to purchase non-farm goods including food and cars, Magalhaes said. Exchanging the coins will take place in a digital marketplace which will be backed by Minasul’s store of crop nutrients and machinery.
Even more enticing, the farmers will be able to acquire the tokens based on current and projected coffee production. With the current harvest, the farmers can exchange as much as 30% for the token. For the next season’s harvest, they can collect 20% and for the season after that, 10%. This will enable the farmers a flexible, simple and affordable line of credit.
Minasul believes that using a cryptocurrency for digital financing will greatly reduce the costs for the farmers as “it won’t require registration though a notary’s office.”
Minasul, which is one of the largest Arabica-coffee cooperatives in Brazil, has been on a digitalization drive in the recent past, with the coffee-backed crypto being its most ambitious project yet. Other initiatives it has engaged in include allowing the farmers to sell their coffee beans through mobile phone transactions.
Cryptos and blockchain technology have continued to penetrate the coffee industry. Blockchain technology is now in use in many coffee supply chains, tracking the coffee from the farm to the cup. One of the most renowned initiatives is the bean-to-cup initiative between Starbucks and Microsoft. There have also been strong indications that Starbucks, the world’s largest coffee chain, could at some point in the future accept crypto payments. Starbucks is one of the investors in Bakkt, an institutional crypto trading and storage platform.
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