Brazilian dairy farmers are tokenizing livestock on the stock exchange to access credit as the sector faces a lending crisis.
RWA & Tokenization ·
Ten dairy cows at Fazenda Engenho Velho in Paraná, Brazil, have been registered as the first tokenized livestock collateral on the country's stock exchange, securing a R$100,000 loan through a rural credit certificate. Each animal received a unique encrypted digital identifier generated from health, behavioral, and location data collected by AI-powered sensor collars developed by Cowmed, an agricultural technology startup. The cows, valued at R$120,000, were registered on B3, Brazil's main stock exchange, after the credit rights were purchased by Target FIDC, a fund that monetizes receivables.
The arrangement addresses a structural problem in agricultural lending: banks typically discount livestock collateral by as much as 60% due to difficulty verifying an animal's condition and survival. By eliminating the need for in-person farm inspections and providing real-time monitoring data, the tokenized approach reduces this uncertainty and allows farmers to access credit on more favorable terms. Target FIDC's director noted that the model responds to banks' increasing demand for reliable collateral information.
Brazil's farming sector faces acute pressure, with bankruptcy protection filings reaching 1,990 in 2025—nearly four times the 534 recorded in 2023—driven by high interest rates, falling commodity prices, and climate stress. Whether this tokenization model can scale beyond this inaugural transaction, and whether regulatory acceptance will extend beyond B3's initial approval, remains unclear.