Indian agricultural warehousing and lending provider Arya.ag is running tests for a tokenization system that would turn electronic warehouse receipts for stored grain into transferable on-chain tokens. The pilot is built on a dedicated Avalanche layer-1 network and is designed to connect digital records with the real-world lending workflow.

According to Arya.ag and its partners, the approach links grain deposits, warehouse receipts, collateral commitments, and loan status through Finternet’s infrastructure. Devika Mittal, Avalanche’s head of India at Ava Labs, told Cointelegraph that testing is underway and that each tokenized receipt would represent ownership of the stored commodity.

Key takeaways

Arya.ag is testing tokenized warehouse receipts for grain storage on Avalanche’s dedicated layer-1, aiming to strengthen the link between physical collateral and on-chain lending records.
Finternet will combine farmer, commodity, warehouse, and insurance data into a “composite token” intended to help banks evaluate collateral risk.
The pilot focuses on improving shared transparency for lenders—such as whether grain is already pledged and what debt is outstanding—rather than immediately expanding the scale of Arya.ag’s existing loan book.
Verification still depends on accurate confirmation of the underlying physical grain, keeping operational controls central to the model.
The Finternet concept traces back to a 2024 BIS paper calling for unified ledgers for tokenized assets alongside legal and regulatory support.

Tokenizing grain collateral on Avalanche

Arya.ag’s system targets a long-standing bottleneck in commodity-backed lending: lenders need reliable, up-to-date information about what collateral exists, who owns it, and whether it has already been pledged elsewhere. Electronic warehouse receipts can help by enabling financing against stored commodities without requiring immediate sale after harvest. But translating those receipts into shared, verifiable digital records becomes the next hurdle.

In the testing described by Arya.ag and Ava Labs, tokenized warehouse receipts would act as digital representations of ownership in stored grain. Mittal said each receipt token would correspond to the commodity stored in the warehouse network. The intent is for the ledger to function as a shared reference point for lenders, borrowers, and related stakeholders.

Finternet’s role is to bridge more than ownership records. Sanmesh Kalyanpur, a director at Finternet Labs, said Arya.ag’s sampling and verification process collects information about stored grain and feeds it into the company’s portal. Finternet then aggregates multiple types of data—farmer, commodity, warehouse, and insurance—into what Kalyanpur described as a “composite token” that banks can use to assess collateral risk.

How the pilot ties receipts, commitments, and loan status

The announcement frames the system as an end-to-end linkage between deposits, collateral commitments, and lending outcomes. Arya.ag and Finternet say their network connects grain deposits, warehouse receipts, commitments made as collateral, and the evolving status of loans tied to those receipts.

That design matters because collateral risk is not only about existence—it’s also about exclusivity and exposure. A lender needs to know whether the grain behind a particular receipt is already pledged, and whether related debt is already outstanding. The companies said their system is intended to provide lenders with a shared record covering what is stored, who owns it, whether it is already pledged, and what debt remains.

However, the companies also stressed that the system’s effectiveness still depends on accurate verification of the physical commodities represented by the digital records. In practice, that means operational checks and sampling procedures remain crucial. Tokenization can improve the traceability of collateral and the speed of information sharing, but it cannot replace the underlying verification that proves the stored grain exists and matches the receipt’s claims.

Arya.ag reported that it stores about $2 billion in agricultural commodities across its warehouse network and supports roughly 120 billion Indian rupees (about $1.26 billion) in loans annually. Its lending arm, Arya Dhan, issues about $230 million in loans each year. The announcement clarifies that these figures describe Arya.ag’s existing business and do not represent assets or loans already brought on-chain.

Finternet’s deeper architecture and the regulatory question

The Finternet framework behind the pilot is not presented as a purely new idea. The concept traces back to a 2024 paper from the Bank for International Settlements (BIS), co-authored by Infosys co-founder Nandan Nilekani and then-BIS General Manager Agustín Carstens. The paper proposed interconnected unified ledgers for tokenized assets, while emphasizing that legal and regulatory frameworks would be required to support such systems.

According to BIS, the model is meant to enable tokenized assets to move through a connected system of records rather than isolated databases. The paper also underscored that technical alignment alone is insufficient; arrangements for legal recognition, operational responsibility, and oversight are central to adoption.

That focus on governance is particularly relevant for collateralized lending, where institutions require clarity on custody, ownership, enforcement, and dispute resolution. In a warehouse receipt context, the “source of truth” cannot be purely software if physical commodity verification is required.

Finternet’s background aligns with wider activity around tokenization on Avalanche. Earlier coverage by Cointelegraph reported that the value of tokenized real-world assets on Avalanche exceeded $1.3 billion at the end of 2025, driven by loans and tokenized money-market funds, illustrating that tokenization is already being used in parts of the on-chain finance stack.

Warehouse-backed lending momentum in India

India has been building momentum around warehouse-backed agricultural financing. The core mechanism—electronic warehouse receipts—allows farmers and businesses to borrow against stored commodities instead of selling immediately after harvest. That can help stabilize income and improve access to capital during seasonal price fluctuations.

The policy environment also matters. In 2024, the Indian government launched a 10 billion-rupee credit-guarantee program aimed at encouraging financing against electronic negotiable warehouse receipts, particularly among small and marginal farmers. This kind of program is designed to reduce risk for lenders, making warehouse receipt financing more accessible.

Arya.ag’s test can be seen as an effort to modernize how those electronic receipts are represented and shared when collateral moves into digital lending workflows. If tokenized receipts and composite collateral records function as intended, banks could gain a more synchronized view of pledged assets and associated exposure.

Still, the companies have not disclosed an expected launch date or the initial deployment’s scale—such as how much grain or lending it would cover—so investors and builders will likely need to monitor the pilot closely to understand performance, verification reliability, and how it integrates with existing lending operations.

For now, the most important question is whether the tokenized receipt model can deliver faster, more reliable collateral assessment without weakening controls over physical verification and pledge status; the next public updates from Arya.ag, Finternet, and Ava Labs will likely determine whether this remains a technical test or evolves into a productized pathway for warehouse-backed lending.