Arya.ag tests tokenised grain warehouse receipts on Avalanche for agricultural lending

India’s Arya.ag is testing a blockchain-based system linking stored grain, electronic warehouse receipts and loan status, potentially giving lenders a shared record for verifying collateral across an agricultural warehouse network holding about US$2bn of crops.

The initiative uses a dedicated Layer 1 network built with Avalanche technology and connects grain deposits, electronic negotiable warehouse receipts, collateral commitments and financing information. Finternet is involved in the infrastructure used to connect warehouses and lenders.

The scale requires an important qualification. Arya.ag holds roughly US$2bn of agricultural commodities and already facilitates about US$1.3bn of loans annually, while its Arya Dhan lending arm provides around US$230m directly. Those figures describe Arya.ag’s existing business, not US$2bn of loans or collateral already transferred onto the blockchain. The companies have not disclosed the volume included in the initial deployment or a timetable for scaling it.

The underlying financing instrument is the electronic negotiable warehouse receipt, or e-NWR, which is already legally recognised in India for borrowing against stored crops. A farmer or agricultural business can store produce rather than selling immediately, obtain a warehouse receipt and use that asset as collateral for financing.

The proposed digital layer is intended to make the records around that process easier for authorised lenders to verify. A shared view of what is stored, whether collateral has previously been pledged and what lending remains outstanding could reduce reconciliation gaps between warehouses and financiers. It does not, however, remove the need to verify that the physical commodity exists and matches the digital record.

Ava Labs India head Devika Mittal said Arya.ag operates the dedicated network and plans ultimately to support other warehouse companies. She said three major banks were already joining, although their identities and lending commitments were not disclosed.

For commodity and asset-based lenders, that is the more significant element than tokenisation itself. Warehouse finance depends heavily on control and verification of inventory, ownership and prior security interests.

If lenders can rely on a common record without weakening physical collateral controls, the system could reduce friction in underwriting grain-backed credit. Claims of faster approvals, lower costs or wider credit access remain prospective until actual deployment data is available.