The Brazilian market has recorded its first formal loan transaction in which tokenized dairy cows were used as collateral. The transaction was executed on the B3 stock exchange, with the financing structure developed by Target FIDC in partnership with agritech company Cowmed. The loan totaled R$100,000.
Each animal received a digital identity linked to data collected by a smart collar. The device continuously transmits real-time information about the cow’s health, behavior, and location. That data is then linked to a unique digital identity and registered on B3 alongside the loan agreement.
“We take a cow — a real, tangible asset — and turn it into a digital asset with a unique identity under continuous monitoring,” said Cowmed CEO Thiago Martins.
How the Collateral Valuation Process Has Changed
According to Humberto Brenner, Director of Target FIDC, banks previously lacked reliable information about the condition of livestock, which led them to significantly undervalue this type of collateral. A cow with a market value of R$20,000 could be valued at only R$8,000.
Continuous monitoring allows lenders to value the collateral much closer to its market value, while registering each digital identity on B3 prevents the same herd from being used as collateral in multiple loan transactions.
Project Scale
According to Cowmed, the company already monitors around 100,000 dairy cows across more than 1,000 farms in Brazil and other countries in the Americas. The combined value of the herd is estimated at more than R$2 B.
Target FIDC expects around 20% of producers to adopt the new mechanism. The company estimates that loans secured by tokenized livestock could reach around R$400 M.
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