Colombian neobank Littio said Wednesday it is switching from Ethereum to Avalanche in an effort to give customers a cheaper means to hedge against the country’s embattled peso.
Leveraging its existing relationship with OpenTrade, a startup offering stablecoin solutions to fintech companies through tokenizing real-world assets, Littio hopes to leverage the company’s yield-bearing savings solution.
To scale with growing demand, Littio said it would transition its holdings from OpenTrade's vaults—dubbed Yield Pots— on Ethereum to those on Avalanche.
Avalanche is the crypto network behind the AVAX, the 13th largest digital asset by market cap.
The blockchain aims to compete with Ethereum by allowing developers to build decentralized apps upon its network—such as decentralized exchanges or NFT marketplaces.
Ethereum is also no longer the best option for customers because Avalanche has lower transaction fees, OpenTrade told Decrypt.
Alongside lower fees, the neobank’s decision to switch to Avalanche is based on the network’s Ethereum Virtual Machine compatibility, sub-second transaction finality, and consistency,” Jeff Handler, chief commercial officer at OpenTrade, told Decrypt.
“Colombia is one of the many Latin American countries where currency devaluation has made financial stability for local retail much more difficult to attain,” Handler added, citing local banks’ strict onboarding requirements.
Littio offers customers the chance to save in dollars due to the country’s ever-weakening currency. Around 1,000 pesos currently buys just $0.24, down about 54% over the last decade.
The bank already allows customers in the country to convert their pesos into dollars by leveraging USD Coin (USDC). Stablecoins can appear on a number of blockchains, including major networks like Ethereum, Solana, and Avalanche.
Wall Street is also interested in Avalanche: In August, investment firm Franklin Templeton made its Nasdaq-listed OnChain U.S. Government Money Fund available on the Avalanche network, also citing its low transaction costs as the reason for its move.
Edited by Sebastian Sinclair