Summary
- A R$100,000 CPR-F loan on B3 was secured by ten cows at Fazenda Engenho Velho in Imbituva, Paraná.
- This marks the first instance of tokenized livestock collateral recognized on Brazil's stock exchange.
- Each cow was assigned a distinct blockchain ID, created from data gathered by AI-enabled collars from Cowmed, thus removing the need for physical farm inspections and minimizing collateral devaluation by banks.
In an innovative move, a dairy farm in Paraná, Brazil, has successfully registered ten cows as collateral for a loan on the nation's stock exchange. This transaction, which involved animals equipped with AI-powered sensor collars, serves as a practical test of the potential benefits of tokenizing physical assets for farmers facing financial pressures.
At Fazenda Engenho Velho, the ten cows, valued at R$120,000 (approximately $23,310), were used to obtain a CPR-F—Cédula de Produto Rural Financeira, Brazil's rural credit certificate allowing loans against livestock or crops—worth R$100,000 (around $19,420) from BMP, a credit company approved by the central bank. BMP subsequently sold the credit rights to Target FIDC, a fund that acquires and monetizes receivables, which then recorded the transaction on B3, the primary stock exchange in Brazil.
The cows were "tokenized," each receiving a unique encrypted digital identifier based on health, behavior, and location data collected by smart collars from Cowmed, an agri-tech firm that utilizes AI to monitor dairy herds. Cowmed's technology encodes this data into a secure identifier linked directly to the credit agreement, eliminating the necessity for on-site inspections.
Typically, banks apply significant discounts to livestock collateral, sometimes up to 60%. For instance, a cow appraised at R$20,000 ($2,380) may only be valued at R$8,000 ($1,600) for loan purposes due to the lack of reliable tracking of the animal’s status. Humberto Brenner, director of Target FIDC, stated, "With monitoring, that uncertainty is eliminated." He also highlighted the increasing demand for reliable collateral and fresh information from banks.
The context of Brazilian agriculture intensifies the urgency of this innovation. Requests for agribusiness bankruptcy protection—recuperação judicial, akin to Chapter 11—reached 1,990 in 2025, nearly quadrupling from 534 in 2023, according to Serasa Experian. The combination of high interest rates, falling commodity prices, and climate impacts has led to a gradual credit crisis in the sector.
Cowmed's CEO, Thiago Martins, described this initiative as a direct response to the challenging landscape. He remarked, "We took the cow, a real and tangible asset, and turned it into a digital asset supported by a unique code monitored in real time." He emphasized that this digitalization enables formal registration on B3 as a financial security, providing farmers with a valuable opportunity for financing amidst strict credit conditions in agribusiness.
Martins elaborated on the benefits for producers: "This operation allows farmers to access credit that is more appealing in terms of cost and limits. We aim to bridge the gap between farmers and financial institutions through this new alternative."
This transaction aligns with the broader trend of RWA tokenization, which involves converting physical assets into digital tokens that can serve as financial instruments. This trend has already achieved a total value locked exceeding $10 billion across DeFi platforms, including tokenized U.S. treasuries and real estate. Cowmed's approach, however, is uniquely tied to livestock.
Currently, Cowmed oversees 100,000 cows across 1,200 farms in Brazil, the U.S., Canada, Uruguay, Paraguay, and Bolivia, with an estimated total value of R$2 billion (about $395.4 million). Martins forecasts that within two years, 20% of this herd—valued at R$400 million, or $77.6 million—could be utilized as tokenized collateral. Target FIDC is already assessing four additional Brazilian farmers, with plans to secure R$5 million, approximately $971,000, in credit through this method by the end of 2026.