The French company behind the award-winning Tunisian Lamar Olive Oil brand has become the latest business in the sector to experiment with the blockchain. Lamar Olive Oil has entered the world of decentralized finance by issuing a blockchain-based bond with Obligate.
Bonds are essentially fixed-income loans made by investors to a company. Lamar Olive Oil has issued bonds in EUROe, a type of cryptocurrency pegged to a traditional hard currency. The company raised €500,000 through this bond issuance to finance its exports and reported a return on investment of 400-500 percent. CEO Ramzi Lahmar stated that fundraising through issuing EUROe had been faster and more reliable than traditional methods.
The use of blockchain technology allowed for faster access to liquidity and simplified the fundraising process. Lahmar also expressed confidence in the confidentiality and security of his company’s data on the blockchain.
Traditionally, companies seeking to fundraise through bond issuances had to go through a lengthy process involving banks and intermediaries. This process could take anywhere from a week to a year. In contrast, issuing EUROe bonds is highly automated and does not require intermediaries, reducing costs.
Obligate CEO Benedikt Schuppli believes that decentralized finance offers small and medium enterprises, such as olive oil producers, a way to diversify funding sources, reduce funding costs, and accelerate access to financing. He sees this type of fundraising becoming more popular in the future.
While other stablecoins have faced volatility due to rising interest rates, EUROe is unique as it is backed by regulated European banks. Obligate aims to make fundraising through crypto bonds as common as applying for a loan at a bank.
