Brazil has completed its first B3-registered credit transaction using tokenized dairy cattle as collateral, marking a milestone in agricultural financing. The deal, valued at R$100,000 (approximately $19,600), involved ten dairy cows from Fazenda Engenho Velho in Imbituva, Paraná, with a total appraised value of R$120,000 (around $23,500). Target FIDC structured the operation, and BMP Sociedade de Crédito Direto provided the funds through a Rural Product Note (CPR-F), later transferring the credit rights to Target FIDC.
The core innovation lies in the digital identity assigned to each cow via Cowmed’s smart collars, which continuously monitor health, behavior, and location. These encrypted identities were linked directly to the loan registration on B3's systems, allowing lenders to track collateral in real time without relying on physical farm inspections. While the process does not create freely traded crypto tokens or involve a public blockchain, it uses tokenization principles for identification and collateral control, reducing risks such as duplicate pledges and improving valuation accuracy. Traditionally, lenders heavily discounted livestock collateral due to verification challenges; continuous monitoring now supports values closer to market prices.
Cowmed CEO Thiago Martins explained that the model transforms a tangible asset into a digitally monitored unit, offering farmers an alternative credit route amid constrained agricultural lending. The structure includes a buffer of about 20% extra animals to maintain collateral coverage, and digital replacement mechanisms if an animal is lost. Target FIDC plans to replicate the model with four more producers, aiming to arrange R$5 million in loans by end-2026, while Cowmed sees a potential addressable credit market of nearly R$400 million among its monitored base of 100,000 dairy cows. The transaction underscores B3's growing role in digital asset infrastructure, aligning with its broader plans for a real-world asset tokenization platform and a Brazilian real-linked stablecoin.
