Xcapit Labs & Naranja X: Credit with Smart Contracts

In November 2024, Xcapit Labs launched together with Naranja X a guaranteed credit pilot using crypto-assets through smart contracts on RSK (now Rootstock). The result was a milestone in blockchain applied to financial services in Latin America: non-custodial credit, automatic guarantee execution, on-chain traceability, and compliance by design.

The problem: credit access as a barrier

Access to credit remains a structural barrier in Latin America. Traditional models rely on credit scoring, manual processes, and pre-existing banking relationships. Millions of people are excluded not because they cannot pay, but because they are invisible to the formal financial system.

Naranja X, with over 10 million users, sought to explore alternative credit models that would allow them to expand their customer base without increasing risk. The premise: if a user can demonstrate solvency through verifiable digital assets, why not use those assets as programmable collateral?

Xcapit Labs' proposal

Xcapit provided the complete technology architecture: third-party audited smart contracts, non-custodial wallet integration, compliance framework, and connection with Naranja X's core systems. The goal was to build a guaranteed credit flow that was secure, auditable, and fully automated.

How the flow works

• The user deposits crypto-assets as collateral in a smart contract deployed on the Rootstock network
• The contract locks the collateral and issues a confirmation signal to Naranja X's system
• Naranja X releases credit in Argentine pesos to the user
• If the user meets the payment schedule, the collateral is automatically released at the end of the period
• If the collateral price drops below a defined threshold, automatic liquidation is triggered
• The entire flow is recorded on-chain, providing complete traceability for audits

Technical architecture

The solution was built on Rootstock (RSK), a Bitcoin sidechain compatible with the Ethereum Virtual Machine (EVM). This choice allowed leveraging Bitcoin's consensus security with the flexibility of Solidity smart contracts.

• Solidity smart contracts: collateralization, release, and automatic liquidation logic audited by independent third parties
• Non-custodial wallet: the user maintains full control over their assets at all times; neither Xcapit nor Naranja X can access the collateral outside the contract rules
• Price oracles: external feeds supplying the smart contract with real-time quotes to assess the collateralization ratio
• API integration with Naranja X core systems: deposit confirmation, credit issuance, and automated reconciliation
• Security audit: complete code review by specialized smart contract auditors before production deployment

Pilot results

The pilot achieved effective credit issuance with crypto collateral, with no security incidents. The full deployment was completed in under 12 weeks. The system operated with zero manual intervention in guarantee execution. The entire process maintained compliance with BCRA regulations and under Xcapit's ISO 27001 certification framework.

Lessons learned

• Compliance from day one: incorporating regulatory requirements from the design phase, not as a later patch, is what enables frictionless scaling
• Non-custodial as a principle: having the user maintain control of their assets is not a feature, it is a fundamental trust requirement
• Interoperability is key: the ability to connect blockchain with traditional financial systems defines the model's commercial viability
• Specialized talent makes the difference: teams with real experience in smart contracts, security auditing, and financial regulation are the determining factor between a proof of concept and a functional product