Fazenda Engenho Velho, a dairy farm in Imbituva, Paraná, Brazil, used ten cows valued at R$120,000 (approximately $23,310) as collateral to secure a R$100,000 (around $19,420) CPR-F loan from BMP, a central bank-authorized direct credit company, which sold the credit rights to Target FIDC, a receivables fund that registered the transaction on B3, Brazil's main stock exchange—marking the first tokenized livestock collateral formally accepted on the exchange. The deal addresses Brazil's agricultural credit crisis: agribusiness bankruptcy protection requests reached 1,990 in 2025, nearly four times the 534 filed in 2023 according to Serasa Experian, driven by high interest rates, falling commodity prices, and climate shocks. Each cow received a unique blockchain ID generated from health, behavioral, and location data captured by AI-powered sensor collars built by Cowmed, an agricultural tech startup, eliminating the need for in-person farm inspections and the steep discounts—up to 60%—that banks traditionally apply to livestock collateral due to uncertainty about animal condition and survival.
Cowmed AI Collars Generate Unique Blockchain IDs for Each Cow
Cowmed's system cryptographically hashes health, behavioral, and location data points captured by smart collars into tamper-resistant identifiers tied directly to the credit contract. Thiago Martins, Cowmed CEO, told CNN Brazil: "We took the cow, a real and tangible asset, and transformed it into a digital asset backed by a unique code monitored in real time. This digitalization allows formal registration on B3 as a financial security—the process gives the farmer an advantageous opportunity to get financing, opening a new collateral alternative at a time of strong credit restrictions in agribusiness." The CPR-F is a Cédula de Produto Rural Financeira, Brazil's rural credit certificate that lets farmers borrow against livestock or crops.
Banks Discount Livestock Collateral by Up to 60% Without Real-Time Monitoring
Banks routinely discount livestock as collateral by as much as 60%. A cow worth R$20,000 ($2,380) on paper can end up valued at R$8,000 ($1,600) for loan purposes, because lenders have no reliable way to track an animal's condition or confirm it's still alive. Humberto Brenner, Target FIDC director, told Globo Rural: "With monitoring, that uncertainty is eliminated. Banks will increasingly demand real collateral and new information." Martins stated: "The operation allows the farmer to access more attractive credit in terms of cost and limit. We want to connect the farmer and the financial institution with a new alternative."
Brazil Agribusiness Bankruptcy Filings Reached 1,990 in 2025
Brazil's agribusiness bankruptcy protection requests—recuperação judicial, the country's version of Chapter 11—reached 1,990 in 2025, nearly four times the 534 filed in 2023, per Serasa Experian. High interest rates, tumbling commodity prices, and climate shocks have combined into a credit emergency for the sector. The tokenized collateral model emerged as a direct response to this reality, according to Martins.
Cowmed Monitors 100,000 Cows Across Six Countries Valued at R$2 Billion
Cowmed currently monitors 100,000 cows across 1,200 farms in Brazil, the U.S., Canada, Uruguay, Paraguay, and Bolivia, with a combined estimated value of R$2 billion (approximately $395.4 million). Martins projects 20% of that herd—R$400 million, or $77.6 million—could be pledged as tokenized collateral within two years. Four more Brazilian farmers are already under evaluation by Target FIDC, and the companies are targeting R$5 million or around $971,000 in credit through this model by the end of 2026. The deal fits into the broader RWA tokenization wave, which has already hit over $10 billion in total value locked across DeFi platforms via tokenized U.S. treasuries and real estate.
FAQ
What did Fazenda Engenho Velho use as collateral for the loan on B3?
Fazenda Engenho Velho used ten cows valued at R$120,000 (approximately $23,310) as collateral to secure a R$100,000 (around $19,420) CPR-F loan from BMP, which sold the credit rights to Target FIDC, a receivables fund that registered the transaction on B3, Brazil's main stock exchange.
How does Cowmed's tokenization system eliminate the traditional livestock collateral discount?
Cowmed's AI-powered sensor collars capture health, behavioral, and location data for each cow, which the system cryptographically hashes into unique blockchain IDs tied to the credit contract. This real-time monitoring eliminates the uncertainty that causes banks to discount livestock collateral by up to 60%, because lenders can track each animal's condition and confirm it is still alive without in-person farm inspections.
Why did Brazil's agribusiness bankruptcy filings increase nearly fourfold between 2023 and 2025?
Brazil's agribusiness bankruptcy protection requests reached 1,990 in 2025, nearly four times the 534 filed in 2023 according to Serasa Experian, driven by high interest rates, falling commodity prices, and climate shocks that created a credit emergency for the sector.
