Indian agrotechnology company Arya ag, the country's largest agricultural warehouse operator, is launching its own first-level (L1) blockchain based on Avalanche technology for the tokenization of grain, warehouse receipts, and credit status. The initiative was reported by CoinDesk, citing a statement from Infosys co-founder and Aadhaar project leader Nandan Nilekani at the Global Fintech Festival in Mumbai. The value of the grain stored in Arya ag's warehouses is approximately $2 billion.
The system is intended to help banks and other lenders verify collateral for agricultural loans more quickly. When a farmer deposits grain in a warehouse, they can obtain a loan against the crop instead of selling it immediately. The problem is that information about the volume of grain, its collateral status, and outstanding debt is often stored in different systems, making it difficult for lenders to verify if the data matches. Arya ag aims to consolidate this information into a blockchain registry accessible to warehouses, lenders, and other system participants.
The statement notes that potential outcomes of the implementation could include faster approval, lower costs, or broader access to credit, although these effects still need to be demonstrated after the system is scaled.
Arya ag is creating its own L1 using Avalanche technology and will manage the network independently. In the future, they plan to open it to other warehouse companies, and banks can already connect to the system. “The L1 is operated by Arya. Currently, it is a specialized deployment that will be scaled to support other warehouse companies,” – stated Devika Mittal, head of the Indian division of Ava Labs. She also added: “It is worth noting that any bank can already join the L1, and three major banks are already joining the L1.”
The system is based on electronic negotiable warehouse receipts (e-NWR). These documents are already used in India and have legal recognition as collateral for bank loans on agricultural goods. Avalanche reported that India is moving its agricultural lending infrastructure on-chain to expand access to financing for millions of farmers.