Banks across Turkey are conducting an intriguing experiment. They are now transferring a digital currency representing physical gold bullion.
It is well-documented how various countries continue to stockpile gold. While it may not replace fiat currencies, it still provides a stable store of value, for the most part.
Digital Gold Transfers in Turkey
A lot of things are changing in Turkey as of late. The demand for innovative payment solutions is ever-present. It now appears that domestic banks want to try and experiment as well. Their decision to tokenize physical gold reserves is rather remarkable.
These reserves are now being transferred across a digital network. Rather than creating units of gold, the Turkish banks opted for a digital currency. This currency can be moved across a native blockchain solution developed by Istanbul Clearing, Settlement, and Custody Bank.
While details remain somewhat scarce, several aspects can be highlighted. The native currency is known as BiGA. It represents one gram of gold started in the Istanbul Stock Exchange‘s vaults. It is unclear how many of these tokens are in circulation at this time.
Targeting Crucial Use Cases
It appears that banks across Turkey see a lot of merit in this concept. It can be used for a wide variety of purposes. These include improved integration and reconciliation, as well as monitoring, and even export of digital assets.
Not all Turkish banks are part of the trial at this time. Notable partners include Ziraat, Garanti BBVA, Vakif, Kuveyt Turk, and Albaraka Turk. These institutions transfer BiGA units in real-time over the underlying distributed ledger.
In the future, this system will be extended to more partners and end users. There is also a plan to build native mobile wallet solutions. These wallets will be provided by the banks participating in this digital gold ecosystem.
Other details have not been communicated at this point.