Ten dairy cows at a farm in Paraná, Brazil, have become the first livestock used as tokenized collateral formally registered on the country's main stock exchange, opening a potential new credit pathway for farmers facing tightening financial conditions. Brazil is home to the world's largest commercial cattle herd, with more than 200 million head, according to IBGE, the national statistics agency—meaning even partial adoption of livestock-backed tokenization could unlock significant lending capacity at national scale.

Fazenda Engenho Velho, located in Imbituva, Paraná, used ten cows valued at R$120,000 (approximately $23,310) to secure a CPR-F—a Cédula de Produto Rural Financeira, Brazil's rural credit certificate that allows farmers to borrow against livestock or crops—worth R$100,000 (around $19,420). The loan was issued by BMP, a direct credit company authorized by Brazil's central bank. BMP then sold those credit rights to Target FIDC, a fund that purchases and monetizes receivables, which registered the entire transaction on B3, Brazil's primary stock exchange.

This marks the first time tokenized livestock collateral has been formally accepted on B3.

Each cow received a unique encrypted digital ID generated from health, behavioral, and location data captured by smart collars built by Cowmed, an agricultural technology startup that monitors dairy herds using AI. Cowmed's system cryptographically hashes those data points into a tamper-resistant identifier tied directly to the credit contract, eliminating the need for in-person farm inspections.

Banks routinely discount livestock as collateral by as much as 60%. A cow valued at R$20,000 ($2,380) on paper can be assessed at just R$8,000 ($1,600) for lending purposes, because lenders have historically lacked a reliable way to monitor an animal's condition or confirm it remains alive.

"With monitoring, that uncertainty is eliminated," Humberto Brenner, Target FIDC director, told Globo Rural. He added: "Banks will increasingly demand real collateral and new information."

The broader context intensifies the need for alternatives. Agribusiness represents roughly a quarter of Brazil's GDP, yet bankruptcy protection requests in the sector—recuperação judicial, Brazil's equivalent of Chapter 11—reached 1,990 in 2025, nearly four times the 534 filed in 2023, according to Serasa Experian. High interest rates, falling commodity prices, and climate shocks have created mounting credit pressure across the sector.

Cowmed CEO Thiago Martins described the operation as a direct response to that reality. "We took the cow, a real and tangible asset, and transformed it into a digital asset backed by a unique code monitored in real time," he told CNN Brazil. "This digitalization allows formal registration on B3 as a financial security—the process gives the farmer an advantageous opportunity to get financing, opening a new collateral alternative at a time of strong credit restrictions in agribusiness."

Martins emphasized the practical benefit for producers: "The operation allows the farmer to access more attractive credit in terms of cost and limit. We want to connect the farmer and the financial institution with a new alternative."

The transaction aligns with the broader real-world asset (RWA) tokenization movement—the conversion of physical assets into digital tokens usable as financial instruments—which has surpassed $10 billion in total value locked across DeFi platforms through tokenized U.S. treasuries and real estate.

Cowmed currently monitors 100,000 cows across 1,200 farms in Brazil, the United States, Canada, Uruguay, Paraguay, and Bolivia, with a combined estimated value of R$2 billion (approximately $395.4 million). Martins projects that 20% of that herd—R$400 million, or $77.6 million—could be pledged as tokenized collateral within two years. Four additional Brazilian farmers are already under evaluation by Target FIDC, and the companies are targeting R$5 million (around $971,000) in credit through this model by the end of 2026.