Littio provides “yield pots,” or actual asset-backed yield vaults.
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Littio, a neobank based in Colombia, is effectively integrating decentralized finance (DeFi) with conventional financial systems to offer dollar-denominated financial instruments to its clientele. The South American institution has introduced a novel product in collaboration with OpenTrade, a company that specializes in stablecoin yield offerings that are supported by tangible assets.
Clients of Littio now have the opportunity to utilize ‘Yield Pots’ via the Avalanche network, allowing them to earn returns that are underpinned by U.S. Treasury bills. As indicated in a press release distributed to The Defiant, these accounts have successfully managed $80 million since their inception four months ago on the Ethereum platform, resulting in a yield payout of $250,000.
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Jeff Handler, the Chief Commercial Officer at OpenTrade, remarked, “We view this as a case study demonstrating how products that combine stablecoins and real-world assets can be effectively packaged within high-quality, user-friendly financial applications such as the Littio app.” This collaboration exemplifies the potential of merging innovative financial technologies with traditional investment vehicles.
It was conveyed to that this initiative would enable them to “gain significant traction with ‘mainstream’ non-crypto users who can unlock value through enhanced access to USD-denominated financial products.”
This strategy is designed to enhance financial inclusion in a region that urgently requires access to U.S. dollars. According to Visual Capitalist, approximately 20% of the population in Latin America is unbanked, with Colombia experiencing an even higher rate of 40% as of 2021. However, this figure represents a notable decrease from 54% in 2019, indicating a positive trend that is expected to continue.
Research conducted by Chainanalysis in October 2023 indicates that Colombian users engage in approximately $200 million in cryptocurrency transactions each year. This level of activity positions Colombia as the 32nd country globally in terms of digital asset adoption, while it ranks fourth among Latin American nations, following Argentina, Brazil, and Mexico.
A significant development in the cryptocurrency landscape is the transition of Littio and OpenTrade from the Ethereum network to Avalanche. According to Handler, the compatibility of Avalanche with the Ethereum Virtual Machine (EVM) suggests that companies are not completely abandoning the ecosystem. The platform’s ability to provide sub-second transaction finality, minimal transaction fees, and reliable performance has made it an attractive option for institutional applications and tokenized assets.
This is not the first instance of a Colombian organization engaging with a cryptocurrency initiative. In June, Bancolombia Group, the largest bank in the country, partnered with Chainlink to implement proof of reserves for its COPW stablecoin. This move marked the organization’s entry into the Web3 space, following a decade of research and exploration in the field.
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