Turkey’s Istanbul Clearing, Settlement and Custody Bank (Takasbank) announced that its blockchain-based, physical gold-backed system is now live.
Takasbank developed BiGA Digital Gold to provide an option for a blockchain-based system for gold. Mainly targeted towards banks and institutional investors, with BiGA, gold can now be traded in a digitized form according to the official announcement.
The BiGA system was first announced in September 2019. It allows participating banks to use blockchain for quick and easy settlement of digital assets that represent a unit of physical gold. According to specifications, each unit asset represents one gram of gold that is stored in vaults of the Borsa Istanbul (BIST) Turkish stock exchange.
The project aims to put into application blockchain technology to benefit from quick and easy settlements, while preserving full regulatory compliance. Thus, BiGA enables access to the gold markets via digital assets that are fully-backed by the commodity. Speaking to Turkish news agency AA, Takasbank officials said:
“This platform 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.”
According to Takasbank the BiGA Digital Gold platform has seen a list of banks joining in their efforts. Financial institutions, including state lenders Ziraat and Vakif, private lender Garanti BBVA, and private and state banks Albaraka Turk, Kuveyt Turk, and Ziraat Participation, have joined the ranks of the project.
Takasbank as a clearing and settlement house in Turkey, provides counterparty clearing services for particular markets and is under the supervision of financial regulatory agency, the Capital Markets Board of Turkey.
This is not the first attempt at digitizing the gold commodity, with most notable efforts coming from Paxos, with its PAX Gold token that is also fully backed by the commodity stored in London vaults.
The trend for applying blockchain technology has been well-received in Turkey, and the country’s efforts put it ahead of a row of competing economies. In September 2018, BIST developed a blockchain-based system to improve financial data transfers in collaboration with Takasbank and the Central Securities Depository of Turkey.
Besides the steady growth of blockchain infrastructure, Turkish officials have hinted that a blockchain-based digital Turkish Lira may be ready for testing in the upcoming year.