B3, Brazil's main stock exchange, has marked a milestone by registering the country’s first farm loan secured with tokenized livestock. Ten dairy cows, monitored by sensors and valued at R$120,000, were used as blockchain-verified collateral to back a R$100,000 loan, keeping a 1.2x collateral margin.

The cows wear collars equipped with sensors that continuously track their health and location. This data feeds into an AI-driven system, creating a digital record on the blockchain that confirms each animal’s condition and value in real time. This method replaces traditional physical inspections, which often required time-consuming visits to farms.

The deal involved three main parties: Cowmed, providing the monitoring technology; BMP Sociedade de Crédito Direto, handling the loan issuance; and Target FIDC, managing receivables registration on B3’s platform. Cowmed currently tracks about 100,000 cows across 1,200 farms in six countries, representing R$2 billion in total herd value and potentially enabling up to R$400 million in collateralized loans.

Brazil’s agricultural sector is under pressure from growing farm debts and financial reorganizations, making traditional lending riskier. The blockchain-backed tokenization offers lenders a real-time, transparent view of collateral, reducing the need for costly and slow on-site inspections. Encouraged by this success, Target FIDC plans to process four more similar loans totaling R$5 million by the end of 2026.

B3 is also aiming higher: it plans to launch a full tokenization platform along with a Brazilian real pegged stablecoin later this year. The stablecoin would simplify settlements of tokenized assets, avoiding constant conversions between crypto and fiat money. This move could put B3 in direct competition with private tokenization services trying to capture the same market.

Using livestock as collateral carries inherent volatility, but this innovative approach signals a shift in how agricultural finance can evolve through technology.

Markets responded calmly to the announcement, with no immediate impact on B3’s trading volumes or stock price.