This week, the largest stablecoin by market cap, Tether (USDT), announced a major investment into Latin American agricultural giant Adecoagro. This maneuver follows a string of high-profile investments made by Tether as it seeks to diversify its portfolio and expand its operations into other markets. Here’s what you need to know about Tether investing in Adecoagro and what it could mean for the blockchain and farming sectors moving forward.
Tether Investing in Adecoagro
Adecoagro is a prime contender in the Latin American farming and green energy sectors. It was founded in Luxembourg before expanding operations into Argentina in 2002. Two years later, the company expanded operations into Uruguay and Brazil. In 2005, Adecoagro expanded operations into the clean energy sector. Today, it’s a top provider of Ethanol, energy, and food.
Source – Adecoagro
Adecoagro has multiple industrial facilities located throughout Latin America including Argentina, Brazil, and Uruguay. According to company documentation, the firm controls 213,500 hectares of farmland where it leverages innovative farming techniques to create crops, rice, dairy, and sugarcane. Last year the company farmed 2.8 million tons of agricultural products and is credited with producing +1 million MWh of renewable energy.
Adecoagro is publicly traded on the New York Stock Exchange. It has made strategic investments into other corporations over its lifespan including a 2021 investment into Agro Token. This maneuver was seen by many as a means to uphold the firm’s commitment to integrating blockchain technology into the agricultural sector. Specifically, Adecoagro holds a 10% stake in the startup.
Agrotoken – Tether Investing in Adecoagro
Agrotoken seeks to leverage the benefits of blockchain technology and tokenization to improve the agricultural sector. The platform enables farmers and producers to convert their commodities into digital tokens. This maneuver enables them to trade and sell their assets with more efficiency and transparency. Additionally, it opens its products to a global investment community while enabling additional benefits such as fractions tokenization.
Agrotoken worked closely with Bosch to create multiple stablecoins based on commodities. Currently, the firm has three stablecoins in operation, SOYA, CORA, and WHEA. These peons stimulate economic activity for farmers and producers while opening up the market to more investors.
Impressively, Agrotoken has secured a reputation for quality and service. The company has worked with the Latin American banking giant Santander, where it helped tokenize loans and commodities in Argentina. The company has worked with +1000 farmers, conducted $70M in tokenization deals across 250 merchants and +40 grain holders, and has successfully tokenized +230K tons of produce.
Tether Investing in Adecoagro
An SEC filing reveals the details of the transactions to the public. Tether invests in Adecoagro via an agreement to acquire a 9.8% stake in Adecoagro SA for $100M. This maneuver would place Tether directly into the produce and tokenization sectors, enabling the company to continue its global diversification strategy.
Tether
Tether is the largest stablecoin by market cap. The project has been one of the most controversial and remains a hot topic for both developers and legislators. Tether leverages fiat currency and other assets for reserves. The company is one of the best-known stablecoins in the world. Already this year. Tether reported $5.2B in net profit.
Recently, Tether has expanded its entrepreneurial support. The firm has expressed a desire to expand into other key asset classes, including gold, bitcoin mining, payment processing, and cloud computing operations. Notably, Tether also hosts the largest gold-backed stablecoin XAUTH. The next essential asset in the company’s sights is the island.
Tether Expands into Tokenization
One of the major parts of the latest expansion is to expand into the tokenization sector. Tokenxiaiton is a term that refers to converting real-world assets into blockchain tokens. This approach provides major benefits to users including the ability to break large assets down into smaller, more accessible, and affordable tokens.
Tether CEO Paolo Ardoino spoke on the importance of tokenization and how the company seeks to become a leader in the tokenization of Real World Assets (RWA). As part of this strategy, Tether will launch a tokenization platform geared towards RWAs. This project will streamline the tokenization of bonds, stocks, funds, loyalty reward points, and land.
Alloy
Alloy is Tether’s latest tokenization venture. The protocol enables anyone to create synthetic dollar assets using XAUTH as collateral. This next-gen token minting platform will help Tether gain a foothold in the collateralized synthetic digital assets class, which continues to expand monthly.
Tether Investing in AdecoAgro as the Perfect Bridge
Adecoagro is perfectly positioned to help Tether gain a strong presence in the tokenization market. The platform already has a strong market share, and the introduction of more efficient blockchain alternatives is sure to help drive its positioning further. As such, Tether sees Adecoagro as the best option to enter the Latin American market on multiple fronts and via an established presence.
Disruptive Practices that Give Adecoagro Agriculture a Competitive Edge?
Adecoagro is a pioneering force in the market. The company has earned a reputation for its innovative methods and focus on maximizing sustainability. Its operations globally leverage advanced systems, AI algorithms, robotics, and other tech to stay ahead of the competition. Here are just some of the ways Adecoagro is revolutionizing agriculture.
Next Generation Farming
It takes a lot to feed a continent and Adecoagro has taken this task seriously. The company has introduced a method of continuously harvesting year-round. This not-ill strategy doesn’t disrupt the top layer of soil. This approach helps the soil prevent erosion as the top layer is crucial in helping it retain its structure during intense weather.
Adecoagro’s unique approach to farming provides the company with a competitive advantage. The company’s approach improves productivity, fertility, and space efficiency. The company also hosts multiple vertical farms. These locations grow plants via hung tubes instead of in the ground directly. The advantages of this approach are less water usage and better space management. Currently, the manufacturer grows corn, wheat, peanut, sunflower, soybean, and others.
Agriculture 4.0
Adecoagro is a pioneer in the Agricultural 4.0 movement. Agricultural 4.0 represents a shift to the use of AI and advanced robotics to help improve farming capabilities, quality, and production. These systems integrate GPS technology alongside AI algorithms to create massive datasets that are then analyzed using additional AI to find patterns, monitor health, and improve production. This approach allows farmers to focus their efforts on key areas to maximize results.
Biofuels
Another area of expertise for Adecoagro is biofuel production. The company operates a full spectrum manufacturing process that enables it to turn crops and sugar into ethanol fuel efficiently. The firm uses the by-products from its sugar cane operations to improve internal operations. Reversely, ethanol by-products are used as fertilizer for the agricultural projects the company hosts.
Adecoagro has biofuel plants located in Mato Grosso do Sul And Minas Gerais, Brazil. Notably, these plants are dual-purpose as they[both produce usable sugar and ethanol. This strategy has proven to be cost-effective and more sustainable compared to alternatives.
Sustainable Practices
Adecoagro deserves recognition for its ability to create green life cycle products. For example, the company reuses all vinasse and the filter cake residue as fertilizers. It also generates its power from the ethanol it creates in-house. This all-inclusive approach makes Adecoagro stand out amongst the competition.
Dairy
The dairy market is another key area in which Adecoagro has shown leadership. The company has pioneered a well-being program for its dairy farms, placing animal comfort and welfare as a prime concern. This strategy has led to higher food quality. Notably, Adecoagro has two major dairy p[processing plants.
The first is the Chivilcoy plant located in Buenos Aires, Argentina. This plant produces 550k letters per day. The second operation is in the Morteros plant in Córdoba, Argentina, which is responsible for 360K liters of processing capabilities daily. Impressively, these plants reuse their biodigestores to create more energy to operate the plants in-house.
Adecoagro Stock and Financials 
Adecoagro is considered a strong “hold” for many reasons, for one, the company remains a leader across multiple tech sectors including algae and biofuel stocks. It has a massive sway within the Altin American continent and continues to expand its strategic partnerships.
The investment from Tether should help drive interest further in the stock as both companies are market leaders with clear drawn-out plans that have investor support. In the coming weeks, the launch of the tokenization strategies will only help to raise awareness and drive adoption further.
Tether Investing in Adecoagro Signaling a Major Pivot toward Tokenization
The tokenization of RWAs is an atrium area of growth in the market. Tethers pivot toward this sector symbolizes further growth. Additionally, the desire to tokenize produce could have an upending effect within the Latin American farming markets. For now, there’s a lot of potential upside in this acquisition.
Learn about other cool agricultural developments here.
