Littio, a Colombian neobank, is enabling customers to access U.S. Treasury bills through crypto products.
Littio is switching vault holdings from Ethereum (ETH) to Avalanche (AVAX) to scale the products.
Launched in February, the vaults have already garnered $80 million in trading volume.
It’s getting easier for Latin Americans to gain exposure to U.S. Treasury bills.
Colombian neobank Littio is switching blockchain networks – from Ethereum (ETH) to Avalanche (AVAX) – for products, called Yield Pots, that allow users to earn interest on their U.S. dollar deposits.
Why the change? Growing demand for Yield Pots is forcing the operation to scale. Avalanche’s low transaction fees and consistency were cited as reasons for picking the chain.
The Avalanche Foundation launched a $50 million program last year to incentivize the development of real-world assets (RWAs) on its network and this news is a nice win for the platform.
Demand for U.S. Treasury bills
Littio offers exposure to Yield Pots through its partnership with OpenTrade, a London-based firm that develops yield-bearing products by using stablecoins and real-world assets like U.S. Treasury bills.
Stablecoins are cryptocurrencies designed to stay at par with a government-issued currency, typically the U.S. dollar. Real-world assets is a term for assets that exist outside of the crypto ecosystem such as real estate, but are represented on-chain in the form of digital tokens.
“Currently, [Littio] is the only Latin American neobank using [our vaults], but we have more clients set to come online this year offering different types of USDC-based fintech services,” Jeff Handler, chief commercial officer at OpenTrade, told CoinDesk.
“Interested clients are primarily neobanks, centralized exchanges, and payment companies that are already using USDC to fill a gap in demand in USD bank accounts, [USD] payments and [USD] services across Latin America,” Handler added
The company is available in various Latin American countries, including Colombia, Argentina, El Salvador, Brazil and Mexico.
Though Littio’s Yield Pots only launched in February, they have already garnered over $80 million in transaction volume. They have also brought $250,000 in returns to users in the last four months. Littio holds and reinvests between $11 million and $13 million in OpenTrade vaults per month, Handler said.
For comparison, U.S. financial giant Franklin Templeton’s tokenized money market fund – which, quite similarly, allows registered users to gain exposure to U.S. Treasuries – has amassed $435 million in assets since its inception in 2021.
The yield from Littio’s vaults vary between 2% and 5%, according to the company’s website.
It makes sense that the product would attract demand: The Colombian peso is down more than 54% against the U.S. dollar in the last 10 years and has lost 88% since 1990. And it’s not the only Latin American currency facing serious inflation. The dollar looks alluring by contrast.
Depending on where they’re located, Littio customers might also face currency restrictions or a lack of means to open bank accounts through their country’s traditional financial rails — providing them another reason to sign up for Littio.
“Littio and OpenTrade exemplify how Avalanche’s technology can enable underbanked populations to access compelling products and services that are otherwise unavailable or untenable via traditional rails leverage,” said Morgan Krupetsky, head of institutions and capital markets at Ava Labs, which develops the Avalanche blockchain.
