BiGa digital gold: Blockchain-based, physically-backed gold transfer infrastructure developed by Takasbank
Istanbul Clearing, Settlement and Custody Bank (“Takasbank”), which is authorized by The Central Bank of the Republic of Turkey for payment and security settlement systems under Law No. 6493 on Payment and Security Settlement Systems, Payment Services and Electronic Money Institutions, has been working on a new transfer infrastructure platform called BiGa – the abbreviation of ‘bir gram altın’, which stands for ‘one gram of gold’ in Turkish – since early 2018.
BiGa, which does not have a value on its own, is designed as a blockchain powered infrastructure platform enabling the transfer of any digitalized asset. While being currently integrated to the Gold Transfer System1 by Takasbank, this blockchain based infrastructure can be used for the transfer of assets other than gold and can be further developed to be used for payment systems in the future.
On the BiGa platform, participant banks are defined as nodes and only these banks can form blocks, verify transactions and have access to blockchain data. Users can open accounts through participant banks in order to ensure compliance with ‘Know Your Customer’ regulations and will be able to trade BiGa tokens 24/7 provided that physical gold equivalents thereof are stored in Borsa Istanbul vaults. Regulatory authority has access to and can supervise all transfers on the system at any time. With the exception of the regulatory authority, BiGa ensures complete privacy of transactions as the transfers are secured through complex cryptology and proof algorithms such as but not limited to zero proof knowledge. Only parties to the transfer and the regulatory authority have access to the confidential transfer details but these algorithms also allow other nodes to verify transfers without confidential transfer information. Upon verification by all nodes, relevant cryptic balances are updated on the blockchain. This synthesis of privacy and compliance distinguishes BiGa from other existing blockchain technologies and provides an alternative blockchain based and physically backed platform that can be used in the financial sector in a way compatible with the regulatory requirements.
BiGa is similar to existing cryptocurrencies with its blockchain based decentralized infrastructure and use of cryptographic algorithms. However, BiGa’s physically backed, gold value indexed system, along with its compatibility with regulatory supervision, differentiates BiGa from the existing cryptocurrencies.
BiGa is not yet available for the end-users. Upon successful completion of participant tests in May 2019, Takasbank has recently published a detailed white paper2 to outline the technical details and future developments concerning BiGa such as but not limited to concealing the currently public keys representing the identities of transacting parties and developing an online wallet for individual users to enable transfers independent from the nodes (banks). Version 1.0 of BiGa went live on December 30, 2019 with six participant banks. Version 2.0 is expected to be launched in December 2020.
Footnotes
1 Gold Transfer System allows parties to electronically transfer gold between their accounts in different participating banks and can be summarized as EFT of gold. As of September 12, 2019, there are sixteen banks participating in Takasbank’s Gold Transfer System.
2 Currently only available in Turkish, English version is expected to be available soon.
