India’s largest integrated agricultural warehousing company, Arya.ag, is bringing its crop-collateral infrastructure onchain as part of a project designed to make agricultural lending more transparent and easier for banks to verify. The system, developed with Finternet Labs and Avalanche, connects records covering grain deposits, electronic warehouse receipts, collateralization and loan status through a dedicated Avalanche Layer 1 network. Arya.ag currently holds approximately $2 billion worth of agricultural commodities across its warehouse network.
That figure represents stored crops potentially available as collateral rather than $2 billion of loans already tokenized onchain. The company facilitates approximately $1.3 billion in agricultural loans annually, while its lending subsidiary Aryadhan directly disburses around $230 million. Three major banks are expected to participate in the blockchain network, although their identities have not yet been disclosed.
Turning Stored Grain Into Verifiable Collateral
Warehouse-receipt financing allows farmers to obtain credit without immediately selling crops after harvest. A farmer deposits produce in a registered warehouse and receives an electronic negotiable warehouse receipt, or e-NWR, establishing ownership of the stored commodity. That receipt can then be pledged to a lender as collateral. Arya.ag’s blockchain project is designed to connect the different records involved in that process. By placing information about deposits, warehouse receipts, collateral and loan status on a shared ledger, authorized lenders can verify whether crops exist, who controls the relevant receipt and whether the collateral has already been pledged elsewhere.
Finternet plans to extend the model through what it calls composite tokens, combining information about the farmer, commodity and potentially insurance coverage into a verifiable digital object. The objective is not to turn sacks of grain into freely traded cryptocurrencies. Instead, tokenization provides a digital representation of the financial rights and records surrounding physical agricultural commodities.
India’s $2B Pilot Targets a Larger Credit Problem
The project builds on work announced by Finternet Labs and Avalanche in February, when the companies identified approximately $2 billion of agricultural assets as an initial tokenization opportunity. Finternet’s model draws from work developed by Infosys co-founder Nandan Nilekani and former Bank for International Settlements general manager Agustín Carstens around interoperable financial infrastructure. The initiative also aligns with India’s effort to expand warehouse-receipt financing. The government launched a ₹1,000 crore Credit Guarantee Scheme for e-NWR Based Pledge Financing in December 2024, designed to encourage banks to lend against crops stored in accredited warehouses. The underlying economic problem is significant.
Farmers can face pressure to sell immediately after harvest, when additional supply can weigh on prices. Access to warehouse-backed credit gives them liquidity while allowing them to keep their produce stored and potentially sell later. Blockchain does not eliminate the underlying credit risk. Banks must still assess commodity prices, crop quality, insurance, borrowers and warehouse reliability. Tokenization also does not guarantee lower interest rates or faster loan approval. Its potential advantage lies instead in making collateral records easier for multiple authorized institutions to verify and reconcile. That distinction makes Arya.ag’s $2 billion figure important.
The company is not announcing a $2 billion blockchain lending program. It is bringing digital records associated with a warehouse network holding roughly $2 billion of physical crops into an onchain system that can support lending against those assets. If participating banks ultimately use that infrastructure at scale, the experiment could demonstrate one of blockchain’s less speculative applications: connecting real-world collateral with regulated credit markets without requiring the underlying asset itself to leave the traditional economy.
