Turkey's Istanbul Clearing, Settlement and Custody Bank (Takasbank) announced that its blockchain-based, physical gold-backed transfer system is now live.

Turkish Takasbank launched BiGA Digital Gold to provide banks with a blockchain-based system for the issuance, repayment and transfer of digitized gold, according to an announcement on Dec. 30.

The BiGA system — first announced in September 2019 — enables participating banks to use blockchain tech to transfer digital assets representing a quantity of physical gold. Each asset represents a gram of gold that is physically stored in vaults of the Borsa Istanbul (BIST) Turkish stock exchange.

The BiGA project aims to "establish an infrastructure that will allow for the execution of the transfer of dematerialized gold at certain standards with their physical equivalents kept in safe custody using blockchain technology," the official website explains. 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."

Major Turkish banks are on board

Takasbank launched the BiGA Digital Gold platform with the participation of several Turkish financial institutions, including state lenders Ziraat and Vakif, private lender Garanti BBVA, and private and state participation banks Albaraka Turk, Kuveyt Turk, and Ziraat Participation.

Takasbank is the central clearing and settlement house in Turkey, which also provides central counterparty clearing services for specific BIST markets designated by the local financial regulatory and supervisory agency, the Capital Markets Board of Turkey.

Turkey goes full throttle on blockchain

Following the announcement of plans for a national blockchain infrastructure, Turkey has seen steady growth in blockchain projects, both in the public and private sectors. In the 2020 Annual Presidential Program, Turkish President Recep Tayyip Erdogan said that the government would finish testing its blockchain-based “Digital Lira” that year.

In September 2018, BIST developed a blockchain-based system to enable better financial data transfers in collaboration with Takasbank and the Central Securities Depository of Turkey.