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Turkey’s Takasbank Sets Up Digital Gold Transfer Platform

Takasbank, the Turkish clearing, settlement, and custody bank, sets up BiGA Digital Gold, a gold trading platform based on blockchain technology. According to Takasbank, the project would offer tokenised units of gold to users. The gold will be backed by the Borsa Instanbul’s physical reserves.

The project would have a lot of benefits, including traceability and 24-hour trading services. There are also plans to make the project accessible to consumers in future.

Tokenized gold offers an alternative investment opportunity

With a tokenised gold, users can buy gold remotely in fractional pieces. It will enable more participants in the industry, especially those who do not have huge capital outlays to trade on gold. With the fractional gold, users can become part of the community. There will be no need to safeguard the gold physically since the tokenized gold is kept at the reserved bank. But users must protect their private keys, as this is the only way they could ensure the safety of their tokenized gold.

According to the announcement, the project was launched last year. However, the team members made some tests and adjustments to prepare for actual takeoff. There were collaborations from the members of the Gold Transfer System of Takasbank. These members include Ziraat Bank, Vakifbank, Kuwyt Turk, Garanti BBVA, as well as Albaraka Turk.

Takasbank reiterated that the platform would enable complete transaction privacy. With the blockchain-based portal, the regulator would be able to monitor transactions effectively without any interference.

How the BiGA Gold system works

The BiGA system allows participating banks to make use of blockchain technology to transfer digital assets that represent a certain quantity of physical gold.

The BiGA project wants to set up an infrastructure that will offer opportunities for the execution of the transfer of decentralized gold, which will be measured with its physical equivalents. The decentralized gold would be kept in custody using blockchain technology.

Market participants can utilize the Tradewind platform to buy and sell precious metals. In doing so, they would need to adhere to the rules and best practices governing the exchange of digital assets. The Tradewind platform makes sure that all participants follow the laid out rules and adhere to the industry standards.

After agreeing to ban Facebook’s Libra cryptocurrency, Germany is now doubling down on its plan to stop parallel currencies. Germans recently passed a strategy that touches blockchain and cryptocurrency comprehensively and vows against parallel financial systems initiated by corporations. Berlin buckles up for the fight German chancellor Angela Merkel and her cabinet passed a comprehensive blockchain strategy on Wednesday. The government believes that the economy should make use of digital transformations but must also be aware of the risks arising out of these technologies. Finance minister Olaf Scholz said that blockchain technology could become the basis for the internet of the future. He also said, “We want to be at the forefront and further strengthen Germany as a leading technology location. At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.” The government also wants to work in close cooperation with its European and global peers to ensure that stablecoins don’t end up becoming alternative currencies. Berlin will also focus on its dialogue with German central bank, Bundesbank, to talk about a digitized version of the central bank currency and the possible risks of such coins. Germany’s move is a threat to Facebook The German government has a holistic plan to tackle growing issues with digital currencies. However, it plans on introducing electronic bonds in the domestic market that will be issued on blockchains. The government, alongside France, has already pledged to ban Libra. The French authorities have also adopted a highly critical stance on Facebook’s Libra, and they are also looking forward to launching a digitized legal tender of their own. Meanwhile, the European Central Bank is also looking forward to the creation of a public digital currency, backed by central banks, that would eliminate the need for Libra. Francois Villeroy de Galhau, a member of the ECB board, said that Libra highlighted the gaps in European regulations and said that the company would be treated with a tough approach. This would create further regulatory and operational hurdles for the American social media giant that aims to leverage its 2+ billion userbase to launch a new digital currency. Libra will be a stablecoin backed by government securities, but with European countries launching their own government-backed stablecoins, it will face stiff competition in the market.

In 2017, the Royal Mint of the United Kingdom wanted to launch digital gold. However, the plan did not go through after the CME exchange group pulled out of the project.

Even IBM has its distribution of blockchain-engineered precious metals known as TrustChain. The portal is an association of the diamond and gold industry players.

Technology Utilized

The Takasbank digital gold platform uses JP Morgan’s engineered Ethereum blockchain. According to a Takasbank spokesman, the team integrated the cryptographic model into the Ethereum framework.

Other digital gold coin transfer systems

Although BiGA may be new, there are other established digital gold transfer systems. Others are still springing up. Last week, Paxos received a license in New York for its PAX Gold digital currency. According to the license, the digital currency would be backed by gold, just like BiGA.

Several other companies have reached this landmark of establishing a gold-backed digital currency. Kratcoin is another good example, although its market capitalization is relatively volatile.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.