Brazilian Farmers Use Tokenized Cows to Secure Farm Credit

A Brazilian dairy farm has used blockchain-linked cows to secure R$100,000 (approx. US$19,500) in financing, in what has been reported as the first operation of its kind registered on Brazil’s B3 stock exchange.

Fazenda Engenho Velho, a farm in Imbituva in the state of Paraná, pledged ten cows valued at R$120,000 (approx. US$23,500) through a Financial Rural Product Note, or CPR-F. The credit was provided by the BMP bank, before another fund acquired the resulting credit rights and registered the transaction on Brazil’s principal stock exchange.

The animals wear smart collars developed by agricultural technology company Cowmed. Using sensors and AI, the devices continuously track data including health, activity, and location. 

Each cow is assigned a unique encrypted digital identity linked to the credit agreement, allowing lenders to monitor the cows remotely as collateral without needing repeated physical farm inspections. The system also reduces the risk of the same animals being fraudulently pledged in multiple transactions. 

Conventional lenders may drastically reduce valuations of livestock as collateral, by as much as 60%, because of uncertainty over an animal’s condition. Continuous monitoring could therefore help farmers borrow against a value closer to the market price of their herd and secure more capital.