Arya.ag, the leading agricultural warehousing enterprise in India, is leveraging the Avalanche blockchain to convert grain inventories, storage receipts, and loan statuses into digital tokens. This aims to provide lenders with a more dependable method to authenticate the agricultural yields securing farm loans.
The project was unveiled on Thursday at the Global Fintech Festival in Mumbai by Nandan Nilekani, co-founder of technology giant Infosys and the principal architect of India’s Aadhaar digital identity framework.
Additionally, a separate initiative known as Finternet is helping establish the operational rules governing how storage facilities and financial institutions interact within the network. Finternet offers digital architecture designed to connect financial value and physical assets globally, a concept proposed by Nilekani alongside Agustín Carstens, former general manager of the Bank for International Settlements and former governor of the Bank of Mexico.
The issue Arya’s tokenization initiative aims to resolve
When farmers deposit grain into a storage facility, they have the option to secure a loan against those goods instead of executing an immediate sale.
Currently, however, the documentation tracking stored commodities, whether those items are already encumbered as collateral, and the remaining debt balances often reside across disconnected systems. This fragmentation causes delays and increases friction for lenders attempting to verify all details prior to loan authorization.
Migrating these records onto a blockchain—a synchronized digital ledger accessible simultaneously by warehouse operators, creditors, and authorized participants, rather than maintaining siloed paperwork—can streamline the entire procedure.
The primary focus centers on upgrading the underlying framework for commodity-secured lending rather than promising an immediate guarantee of credit expansion. Outcomes such as accelerated approvals, reduced expenses, or broader financial inclusion are viewed as potential benefits that will become evident as the platform rolls out, according to official statements.
Arya.ag is launching its own customized layer-1 blockchain powered by Avalanche infrastructure, created by Ava Labs. Arya.ag will administer the network directly with intentions to extend access to competing storage operators down the road.
Certain credit facilities originate directly from Arya via its proprietary non-bank financial subsidiary, Arya Dhan. Other loans are extended by commercial banks and financial institutions, which finance commodities held in Arya’s facilities after utilizing system records to inspect inventory and confirm the assets have not been pledged elsewhere.
The primary financial instruments involved are electronic negotiable warehouse receipts, or e-NWRs. These documents are already established and legally sanctioned throughout India for backing bank financing against stored agricultural commodities.
The layer-1 network is operated exclusively by Arya as a tailored deployment today, which will eventually expand to accommodate other warehousing entities, explained Devika Mittal, head of India at Ava Labs, during an interview. She noted that commercial banks are already able to participate, with three major institutions currently onboarding to the layer-1 network.
To illustrate the magnitude of operations, Arya.ag maintains approximately $2 billion worth of agricultural inventory distributed across its storage network, according to documentation provided to CoinDesk.
Within its traditional, non-blockchain operations, Arya.ag handles roughly $1.3 billion in yearly loan volume, while Arya Dhan directly disburses around $230 million in credit.
The organizations did not disclose the precise volume of assets currently migrated to the blockchain infrastructure, nor did they outline a specific schedule for scaling the platform. Financial specifics regarding the partnership with Ava Labs were withheld.
This development unfolds against the backdrop of India’s persistent agricultural credit deficit. While agricultural workers represent nearly 40% of the nation’s populace, a mere 15% secure access to formal financial credit, leaving the majority reliant on informal and frequently costly lending alternatives.
Warehouse-secured lending is designed to bridge this divide, yet adoption remains limited, particularly among smaller agricultural producers, despite the existence of a supportive legal framework.
Arya’s project serves as a clear illustration of how blockchain architecture and asset tokenization are rapidly expanding beyond yield-generating financial instruments like Treasury bonds to resolve tangible, ground-level challenges impacting both producers and lenders.
Originally published at https://www.coindesk.com/business/2026/09/10/indian-agri-warehouse-giant-is-putting-usd2-billion-in-grain-backed-loans-onchain.
