The Brazilian farm Engenho Velho in the state of Paraná became the first in the country to receive a loan secured by tokenized cows. Ten animals with a total value of 120 thousand reais secured a loan in the amount of 100 thousand reais. The CPR-F transaction was conducted by BMP, a direct lending company accredited by the Central Bank of Brazil. The rights to this loan asset were then transferred to the Target FIDC fund, which registered the transaction on the B3 stock exchange. Tokenization is handled by agrotech startup Cowmed, which equips animals with smart collars. These devices monitor the health status, behavior, and geolocation of livestock in real time. The collected data is converted into an encrypted digital identifier linked to the loan agreement, which completely eliminates the need for physical verification of the farm.

The introduction of such technology solves the key problem of traditional lending in agribusiness. Previously, banks included a discount of up to sixty percent in the valuation of livestock due to the lack of reliable information about the condition and location of animals. Umberto Brennera, director of the Target FIDC fund, noted that constant monitoring eliminates this uncertainty, allowing the digital asset to be officially registered on the stock exchange as a security. This scheme has been developed against the background of the increasing complexity of credit conditions in the Brazilian agricultural sector. According to the analytical agency Serasa Experian, in 2025 the number of applications for bankruptcy protection in the industry reached almost two thousand, which is significantly higher than in previous years.

To minimize risks, a protective buffer is included in the transaction: approximately twenty percent more cattle than required are initially included in the collateral. In case of death of an animal, the manufacturer can replace it in the system, and the platform will automatically generate a new hash code for the replacement instance. However, live cattle remains a more volatile asset compared to traditional bonds. Outbreaks of diseases or falling market prices can reduce the value of collateral faster than sensors update the status. Cowmed currently tracks about one hundred thousand heads on 1,200 farms in six American countries. The company predicts that within two years, up to twenty percent of this livestock will be involved in turnover as tokenized collateral, and the Target FIDC fund plans to implement four more similar transactions by the end of the year.

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The material has been prepared solely for informational purposes and does not constitute financial advice or recommendation.