Struggling farmers unlock $20,000 in credit by putting cows on the blockchain

Farmers in Parana, Brazil, struggling to get banks to loan them cash, became the first to tokenize livestock and place 10 dairy milk cows’ tokens for trade on the country’s B3 national stock exchange. They generated nearly $20,000 in credit backed by their cattle, signaling the potential of tokenizing RWAs as a financing tool.

The dairy cow tokenization in Brazil is a world first and serves as a test in a real-world scenario in which farmers are facing increasingly stringent lending limits imposed by local banks on small agricultural businesses.

“We take the cow, which is a real and tangible asset, and transform it into a digital asset backed by a unique code monitored in real time,” Thiago Martins of Cowmed, a Brazilian Agtec company, told CNNBrasil recently.

Martins and his company did not immediately respond to a CoinDesk request for comment.

“This digitization allows for formal registration with B3 as a movable asset,” Martins added. “The process is simple and gives the producer an advantageous opportunity to finance themselves, opening a new alternative for collateral at a time of strong credit restrictions in agribusiness.”