Turkey’s Istanbul Clearing, Settlement and Custody Bank (Takasbank) announced the launch of its physically backed, blockchain-based electronic gold transfer system on Monday.
The system, called BIGA Digital Gold, allows “peer-to-peer transfer of digitizable gold, a physical commodity, via blockchain technology,” the bank said on Friday.
Research for BIGA Digital Gold began in 2018, with trials completed in September, the bank had previously said. Takasbank is currently focusing on creating a structure for digitizing physical commodities and using blockchain in the financial sector.
“As a result of our efforts, we created the Digital Asset Transfer Platform, which distinguishes itself from many similar projects in the world by allowing the use of blockchain technology to transfer digital assets based on physical commodities, not having any value of its own, and ensuring full compliance with existing regulations,” it added.
Assets can be traded on the platform as digital values called “BIGA,” which represents “a gram of gold that is physically stored” in vaults of the Borsa Istanbul Turkish stock exchange. The system provides three main transactions — issuance, repayment and transfer — the bank noted.
“There are also additional features on the blockchain-powered BIGA Platform, including integration with the Gold Transfer System, clearing authorization, as well as monitoring and reporting tools,” it said.
Taking part in the system are state lenders Ziraat and Vakif, private lender Garanti BBVA, and private and state participation banks Albaraka Turk, Kuveyt Turk and Ziraat Participation.
The bank also stressed that the first blockchain-powered financial network was created with participation banks, which were able to transfer gold balances 24/7 after upgrading their internal systems.
Last year Takasbank developed another blockchain-based system for smooth information flow among financial institutions. Takasbank is a subsidiary of Borsa Istanbul, over 80% shares of which are held by Turkey’s Wealth Fund.