Brazil uses tokenized cows as collateral in first livestock-backed loan
Brazil's stock exchange B3 has registered the country's first loan transaction backed by tokenized cattle. The collateral for a 100,000 Brazilian real loan (approximately $19,600) consisted of 10 dairy cows from Fazenda Engenho Velho, a farm located in the state of Paraná.
According to CNN Brasil, the project was structured by investment fund Target FIDC in partnership with agritech company Cowmed. The animals used as collateral are valued at approximately 120,000 reais (about $23,500).
Each cow was assigned a unique digital token linked to an encrypted identifier. The animals are monitored in real time through smart collars that track their health, behavior, and location.
Tokenization replaces physical livestock inspections
The collected data is recorded within B3's infrastructure and used during the loan underwriting process. As a result, banks and financial institutions can accept livestock as collateral without conducting on-site farm inspections.
According to Cowmed CEO Thiago Martins, the technology transforms a real-world asset into a digital financial instrument that meets capital market requirements.
The company noted that one of the biggest challenges in agricultural lending has long been accurately valuing livestock. Due to limited information about animal health and condition, banks have traditionally applied significant discounts when assessing collateral value.
Continuous monitoring allows lenders to use the animals' actual market value when determining loan amounts while reducing risks for financial institutions.
Tokenized livestock could expand farmers' access to capital
The project's developers believe livestock tokenization will make it easier for farmers to obtain working capital for equipment purchases, operational expenses, and business expansion.
Another advantage of the model is that it prevents farmers from using the same herd as collateral for multiple loans simultaneously. If an animal dies, it can be replaced through the digital registry system.
Cowmed currently monitors approximately 100,000 dairy cows across more than 1,000 farms in Brazil and other countries in the Americas. The total value of the monitored livestock exceeds 2 billion Brazilian reais.
The transaction reflects the broader growth of the tokenized real-world asset (RWA) market. In May, analysts reported that the sector had expanded by more than 420% since the beginning of 2025.
While tokenized U.S. Treasury securities remain the largest contributor to market growth, industry participants are increasingly experimenting with tokenizing assets from the real economy and expanding the technology's use cases.Earlier, analysts reported that the market capitalization of tokenized real-world assets surpassed $51 billion, marking a 40% increase since the start of 2026.
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