Ten cows tokenized on B3 used as collateral in Brazil

Ten dairy cows in the state of Paraná were registered on B3 this week with encrypted digital identities created from Cowmed collars and used as collateral to secure nearly $20,000 in credit. Cowmed collars collected each animal’s health, behavior and GPS data, which were converted into encrypted identities and recorded on B3 so lenders could link those identities to a loan agreement. Organizers described the experiment as proof that the technical process of tokenizing animals can operate at a small scale.

The system is designed to reduce the haircut lenders apply to livestock collateral and to prevent the same animal from being pledged for more than one loan. The Paraná pilot involved ten dairy cattle and ran this week; participants called it a limited technical test rather than a commercial rollout.

The pilot comes amid a large measured shortfall in credit for micro, small and medium enterprises. Estimates put the gap between what small businesses need and what they can access at about $5.7 trillion, rising to roughly $8 trillion when informal enterprises are included. Sub-Saharan Africa accounts for about $331 billion of that gap, and the African Development Bank estimates that just 6% of African smallholder farmers have access to formal credit.

Several countries have built pieces of infrastructure to allow livestock to serve as legal collateral. Ethiopia’s central bank operates an electronic registry that names cattle, camels, sheep, goats and poultry as eligible collateral and the country is developing an official livestock identification and traceability system. Ethiopia’s agricultural finance roadmap for 2025–2030 estimates financing demand for livestock costs and herd replenishment at about ETB 911 billion. Organizers and officials say lenders in Ethiopia still need consistent valuation methods, insurance products, veterinary data and a clear recovery process for defaults.

In Nigeria, a central bank registry allows farmers to pledge livestock, including unborn offspring, and contains checks to avoid duplicate pledges. A separate cattle tagging program issues ear tags and digital passports. A $500 million livestock program running through 2028 includes $70 million earmarked to expand access to finance. Nigerian authorities and program managers say those systems are not yet integrated into a single lender-ready product.

Kenya’s Movable Property Security Rights Registry operates continuously and its agricultural data systems had registered more than 7.2 million farmers by 2025. Lenders recorded 34,638 livestock assets as collateral in the year to June 2023, contributing to roughly KSh 5.1 trillion in credit backed by movable assets. Kenyan officials and analysts point to the registry as an example of an electronic system that can record livestock pledges at scale.

Pakistan’s livestock sector accounted for about 14.6% of GDP and more than 62% of agricultural value added, yet fewer than 200,000 of 3.2 million small and medium enterprises have formal credit. In Sindh province just over 10% of farmers hold formal loans and about 80% of rural livestock holders do not own land to use as collateral. Bankers and development specialists in Pakistan report that livestock insurance is scarce; a World Bank survey found only 16% of farmers holding seven to 50 animals met bankability criteria under current conditions.

Mongolia uses a web-based movable property registry that has recorded large numbers of livestock pledge notices. World Bank analysis notes that modern electronic registries can handle core tasks such as recording creditor priority, leaving interoperability between identity, insurance, valuation and recovery systems as remaining challenges.

Organizers and participants in the Brazilian pilot said wider use of tokenized livestock will depend on connecting animal identity and health data with insurance, valuation and legal claim processes so lenders can incorporate the records into standard underwriting and recovery procedures. They warned that if registries and insurance do not link clearly, events such as disease, drought, theft or disputed ownership could remove collateral value and complicate loan recovery.