Brazilian farmers are using tokenized dairy cows as collateral for loans as access to agricultural credit becomes more difficult. In a pilot project in the southern state of Paraná, a farmer used 10 tokenized Holstein cows to back a 100,000-real ($20,000) loan. The transaction marked the first time livestock-backed collateral was registered on B3, Brazil’s main stock exchange and financial market infrastructure provider.
The cows were valued at about 120,000 reais, providing collateral worth more than the 100,000-real loan. Cowmed and Target FIDC structured the deal by assigning each animal a digital identity linked to B3’s registry, making it easier to verify ownership and prevent the same livestock from being pledged more than once.
Cowmed tracks each animal using its AI-powered Smarty Collar, which monitors the cow’s health, location and behavior. The information is linked to a unique digital identity that forms part of the loan agreement, giving lenders a way to confirm the collateral remains in place while the loan is outstanding.
“We take the cow, which is a real and tangible asset, and transform it into a digital asset backed by a unique code monitored in real time,” Cowmed representative Thiago Martins told CNN Brasil.
The system also allows farmers to replace an animal if it dies or add more livestock to increase the value of the collateral supporting the loan.
Brazilian banks have been reluctant to accept livestock as collateral because verifying ownership and tracking individual animals has traditionally been difficult. As a result, many small farmers have faced limited access to credit and higher borrowing costs.
Cowmed said it already monitors about 100,000 dairy cows across more than 1,000 farms, with the herd valued at more than 2 billion reais. The company estimates that about 20% of those farms could eventually adopt tokenized financing, potentially unlocking as much as 400 million reais in agricultural credit.
The model could help connect rural assets with Brazil’s capital markets by giving lenders greater confidence in livestock-backed loans. Even so, broader adoption will depend on how the system performs in tracking collateral, managing loan repayments and handling defaults.
The pilot transaction follows an expansion in B3’s efforts to create tokenized assets. The exchange is building a platform for tokenized real-world assets along with a stablecoin pegged to the Brazilian currency.
It is part of a wider trend in digital finance. Tokenized real-world assets accounted for $34 billion in value in 2026, with US Treasuries leading the way, followed by the commodities and private credit space.
Analysts predict that the market will continue to grow in the coming years. McKinsey expects that tokenized assets will be valued at $4 trillion in 2030, while Standard Chartered predicts that their value could rise to as high as $30 trillion by 2034.
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