Brazilian farmers tokenized dairy cows to get loans, bypassing bank lending limits

Farmers in Paraná, Brazil, have successfully tokenized 10 dairy cows on the B3 national stock exchange, raising nearly $20,000 in credit backed by their livestock amid tightening bank lending restrictions. This project was led by Cowmed, a Brazilian agtech company that uses AI-powered tracking collars to create encrypted digital identities for each cow. This technology prevents double-pledging of the same animal across multiple loans and allows the cows to serve as movable collateral on-chain.

Cowmed equips cows with AI-powered Smarty Collars that continuously track their health, behavior, and location, converting this data into unique digital identities linked directly to credit agreements registered with B3. This system facilitates financing without the need for inspectors to physically visit farms, offering farmers an alternative collateral method during a period of stringent credit limits imposed by local banks. The process aims to simplify formal registration of livestock as financial assets and create new liquidity opportunities for agricultural producers.

Currently, Cowmed monitors around 100,000 dairy cows across more than 1,000 farms, with the herd valued at over $395 million. The company projects that up to 20% of its network could adopt this tokenized financing approach, potentially unlocking approximately $77.6 million in new agricultural credit. This initiative is viewed as a pioneering example of real-world asset tokenization in the agricultural sector, aligning with broader market forecasts that anticipate substantial growth in tokenized asset markets in the coming years.