Indian large-scale agricultural warehousing and storage merchant trials RWA; grain receipts are moved to Avalanche
India’s large agricultural warehousing and agri-finance platform, Arya.ag, is testing the tokenization of grain warehouse receipts. Using Avalanche technology, it builds a dedicated Layer 1 blockchain so that farmers, storage operators, and financial institutions can verify ownership and collateral status of agricultural products within the same system.
The initiative was publicly introduced by Indian tech entrepreneur Nandan Nilekani at the Global Fintech Festival in Mumbai. It is currently in the testing phase, with three major banks participating, though their names have not yet been disclosed.
Arya.ag currently stores about $2 billion worth of agricultural products in its own warehouses, facilitating around $1.3 billion in loans each year. This also makes agricultural product warehouse receipts another major application scenario for real-world asset tokenization (RWA) in India.
The currently disclosed $2 billion refers to the total value of agricultural products stored in Arya.ag warehouses, not to $2 billion worth of assets that have already been tokenized and put on-chain. Arya.ag and Ava Labs have not yet announced the grain size to be tokenized in the first phase, the loan amounts, or the time for full deployment.
Tokenized e-NWRs—each token corresponds to the actual stored agricultural products
What is being put on-chain this time are India’s existing Electronic Negotiable Warehouse Receipts (e-NWRs). Such electronic warehouse receipts have been recognized under Indian law. They can prove that agricultural products are stored in specified warehouses, and farmers can also obtain loans from banks using the warehouse receipts as collateral.
Devika Mittal, Ava Labs’ India负责人, said that each tokenized warehouse receipt represents ownership of the corresponding agricultural products in the warehouse. The system aims to integrate grain storage records, warehouse receipts, collateral status, and loan information into a single set of records.
Arya.ag’s verifiers will collect grain-related information from the warehouse and input it into the platform. Then, Finternet will compile data about farmers, agricultural products, warehouses, and insurance into a “Composite Token,” which banks can use to assess collateral risk.
This architecture mainly aims to solve the long-standing problem of data fragmentation in agricultural financing. When farmers store their harvests in warehouses and apply for loans, banks need to confirm that the grain indeed exists, what its value is, whether it has been pledged as collateral for other loans, and how much debt remains unpaid.
Currently, the relevant information may be distributed across different systems, so financial institutions need to perform additional verification. With a shared ledger, warehouse operators, banks, and other approved participants can view the collateral status simultaneously, reducing the risk of duplicate pledges and data desynchronization.
Arya.ag runs its own dedicated Layer 1; three large banks join the testing
This initiative uses Avalanche technology to build a dedicated Layer 1. The blockchain is operated by Arya.ag itself, while Ava Labs provides the related technology. At present, the network is being tested using Arya.ag’s storage and financial systems. In the future, it plans to expand to other warehouse operators and allow more banks to join.
Mittal said that currently three major banks are participating, but neither side has yet disclosed the names of the banks.
Arya.ag also has agricultural financing capabilities. Its non-bank financial company, Arya Dhan, disburses about $230 million in loans directly every year, while the rest of its financing mainly comes from banks and financial institutions. These institutions determine whether to provide collateralized loans based on the agricultural products in Arya.ag’s warehouses and the related records.
This collaboration is also related to Finternet’s financial infrastructure initiative. Finternet Labs was jointly established by people such as Pramod Varma, an architect of the Indian Aadhaar identity system. The Finternet concept was promoted by Nilekani and former Bank for International Settlements (BIS) General Manager Agustín Carstens, among others, with the goal of building a digital infrastructure that can connect different assets and financial services.
Agricultural products are emerging as a new RWA scenario—targeting India’s farmers financing gap
Arya.ag chose to start with grain warehouse receipts, which is also related to the structure of India’s agricultural financing market. Relevant data shows that farmers account for about 40% of India’s population, while the proportion who can access formal financial credit is around 15%. Many farmers still rely on informal borrowing channels with higher costs.
If farmers sell agricultural products immediately during the harvest season, they are easily affected by price pressure caused by concentrated supply. By storing agricultural products in warehouses first and then using legitimate warehouse receipts as collateral to obtain funds, farmers can delay the time of sale while also securing short-term working capital.
The role of e-NWR tokenization mainly focuses on collateral information management. By recording on-chain, it improves transparency of warehouse receipts, ownership, and loan status, making it easier for banks to verify whether agricultural products have already been pledged as collateral more than once.
In recent years, Avalanche has continued to expand into institutional and RWA markets, including tokenized securities in Japan, funds, and payment infrastructure applications. For this instance, Arya.ag is extending the application scope to agricultural products and agricultural financing.
The plan is still in the testing stage. Arya.ag has not yet announced the scale of the initial on-chain assets, the official commercial launch timeline, or how many years’ worth of loans will ultimately be processed through this system. Whether $2 billion in agricultural products can be gradually incorporated into the on-chain warehouse receipt system will depend on the subsequent involvement of banks, system deployment, and how financing is actually used.
This content was compiled by Crypto Agent based on information from various parties, and (Crypto City) served as the editorial reviewer and editor. It is still in the training stage and may contain logical discrepancies or information errors. The content is for reference only; please do not treat it as investment advice.
“Pushing Agricultural Product Tokenization! India’s Agricultural Finance Platform Partners with Avalanche to Put $2B in Grain Receipts On-Chain”—this article was first published on “Crypto City”