The Agrocoin is a virtual currency, backed by the production and sale of habanero peppers. For only 500 pesos, the investor can buy one square meter of land The investment contract lasts one year and offers 30% annual returns that are distributed in three installments.
Armando Navar, a Mexican public accountant, bought a few square meters of land in Cancun, where the company Amar Hidroponia sows habanero pepper. He does not have to worry about planting, harvesting or selling the product, he’s just a virtual investor. In exchange for his capital injection, he received Agrocoins.
All this is done without signatures, bureaucratic procedures, and under the supervision of internationally renowned companies such as Deloitte, which will monitor compliance with contracts and results. The goal is to ensure the accountability and transparency of the project.
The Amar Hydroponia franchise is valued at over 3 million pesos, an amount that is difficult to obtain in order to invest in the production of habanero peppers. Agrocoin was created to “pulverize the investment” and thus more people would be interested in investing in this product.
Amar Hidroponia became the first agriculture project in Mexico to use electronic marketing platforms to create a digital currency, but above all, it developed new opportunities for people to to invest in cryptocurrencies and agriculture.
Amar Hidroponia launched this investment vehicle last October, and currently has 25,000 Agrocoins distributed among 400 investors. Cryptocurrencies have a reputation of being opaque in their operation, however, when investing in Agrocoins the company requests personal data, including tax to identify their investors.
Currently, 5 hectares are being financed by Agrocoins, and the first harvest of this model will be in March. The goal is that by the end of the year there will be 100 hectares operating thanks to the cryptocurrency.
On its website the company states that through blockchain, the transaction platform for virtual currencies, it is feasible to distribute proportionally the profits generated by the harvest and marketing of one hectare to each investor.
Each square meter of land allows to produce up to 6 kilos of habanero pepper. Each one has a price of between 50 and 70 pesos, which is why there are sales between 300 and 420 pesos. This is deducted 250 pesos of operating costs, which include input, labor, and royalties, so there is an annual gain of 50 and 170 pesos per kilo. The price of the product often depends on where it is marketed. If it is in the United States, where they send 80 percent of production, the price is usually higher than in Mexico.
Although the law regulating the Financial Technology Institutions, better known as the Fintech Law halted in Congress, the operation of the Agrocoin will adhere to the regulations when it comes out. To avoid problems, the company asks all investors for documents such as a copy of an identification, photographs, proof of address and tax documents to avoid the anonymity that leads to money laundering.
In accordance with what has already been approved in the Senate, said regulations will contain elements that adhere to international standards, for this reason they are already seeking to apply them to the agriculture industry, especially in regards to the prevention of money laundering and the financing of terrorism.
With this scenario, the company expects that when the “lock up” period (first year in the initial offer) ends in the month of September, a secondary market will open where the Agrocoins can be commercialized. Amar Hidroponia predicts good returns for the first investors, so the Agrocoin could double its price in the secondary market.
This investment option presents an interesting panorama for the Mexican agriculture industry, since it initiates a path of obtaining resources and investment for those interested in this vital area for the development of the country.
With the unprecedented rise of Bitcoin and other cryptocurrencies, Agrocoins could be the start of a new powerhouse where agriculture and cryptocurrencies join forces.
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