In the commodities and financial sectors, a new cryptocurrency is causing a stir. Since its introduction in early July, the Coffee Coin has had a bright start.
It is attracting coffee growers, producers, and merchants in Brazil, the world’s largest coffee producer.
It is the first cryptocurrency in the world to be backed by physical green coffee stocks. Each coffee coin’s worth is determined by the market price of green coffee, as well as investment demand.
Minasul, Brazil’s second-largest arabica coffee cooperative, released it at the beginning of July 2021. Coffee Coins can be traded on exchanges like StonoEx, which is a partner in the project.
Farmers can also use the token to buy non-farm products like food and cars, according to Magalhaes. The currencies will be exchanged in a digital marketplace backed by Minasul’s inventory of crop nutrients and machinery.
HOW DOES IT WORK?
The Coffee Coin’s equivalent value will follow the same commercial basis as the coffee bean, which is governed by the market daily. The currency’s data is updated through the purchase of a token by people interested in investing. Minasulis in charge of supporting the coin, and its holdings ensure that there are enough Coffee Coins on the market.
REASONS TO BUY ?
REGULATED AND LESS VOLATILE: Because it is connected to the market price of coffee, this cryptocurrency is projected to be less volatile. Other cryptocurrencies, such as Bitcoin and Dogecoin, are influenced by speculation and, on occasion, celebrity tweets. It’s also a solid bet because it’s backed by tangible assets and a significant coffee cooperative.
REDEEMABLE: One will always be able to redeem Coffee Coins for cash from the cooperative or their corresponding value in actual coffee, regardless of what the secondary market price is. In the latter situation, the cooperative established a minimum amount of green coffee that can be traded for Coffee Coins of 1,500kg.
GOOD CALL FOR FARMERS AND COOPERATIVES: Farmers will be able to use the money to exchange their current and future harvests. They will be able to trade up to 30% of the current crop, 20% of the following harvest, and 10% of the following harvest. The adoption of a cryptocurrency, according to Magalhaes, will lower costs for the cooperative and farmers because they will no longer need to register the transaction with a notary.
HASSLE-FREE OPTION FOR TRADERS: This eliminates all of the headaches, time, and fees associated with accepting numerous currencies from purchasers all across the world through the traditional banking system. “A transaction fee of less than [1 cent] for any size COF payment takes only a few seconds, as compared to several days or more, plus significant bank fees and exchange rate fees for bank transfers.”
SAFE AND REGULATED OPTION: Coffee Coin, however, is a tokenized commodity, meaning it is a cryptocurrency token that represents real-world goods. This way of tokenizing a physical item opens up sectors to investors who might not normally have access. Being backed up by a commodity gives it a major advantage and a safe option for its users to avail the benefits
CoffeeCoin is a utility token and a form of currency that is used as the foundation for transactions on the Waves network’s peer-to-peer decentralized ledger. CoffeeCoin is backed by the demand for specialty coffee, unlike a Bitcoin-style cryptocurrency, which is backed only by a notion of worth. Its worth, according to the corporation, is based on both its capacity to give immediate service and its ability to provide long-term service.