Türkiye’s largest private financial institution, Is Bank, has taken a significant leap in the country’s financial history by announcing the issuance of its first blockchain-based bond, valued at $100 million. This move marks a key development not only for Türkiye’s banking sector but also for emerging markets exploring the integration of blockchain in capital market transactions.
As revealed in the bank’s statement, the newly issued financial instrument has been categorized as a “Digitally Native Note” and was executed using Distributed Ledger Technology (DLT). This decentralized, secure digital system enables transparent and efficient recording of transactions. The entire issuance and settlement process was completed on the same day via the Digital Financial Market Infrastructure (D-FMI) platform, operated by Euroclear.
Supporting Recovery Through Innovation
The proceeds raised from the bond have been earmarked for critical support in Türkiye’s southeastern regions, which were heavily impacted by the 2023 earthquakes centered in Kahramanmaraş. The funds will be directed toward aiding individuals, small-scale farmers, and micro- to small-sized enterprises. These efforts aim to enhance the economic resilience of the affected communities and accelerate the reconstruction and recovery process in the disaster-hit zones.
Is Bank has partnered with several international financial institutions to bring this initiative to fruition. The International Finance Corporation (IFC), a member of the World Bank Group, served as the sole investor in the bond. Citigroup Global Markets played the role of dealer, while Citibank’s London branch acted as the agent bank responsible for managing the transaction.
A Benchmark for Blockchain in Capital Markets
Is Bank’s CEO, Hakan Aran, highlighted the issuance as a landmark development for Türkiye’s financial ecosystem, suggesting that this was the first time a private Turkish bank had utilized blockchain technology for a Eurobond issuance. He expressed confidence in the local banking sector’s capacity to engage with global markets and adapt swiftly to technological advancements. Aran also conveyed that this bond issuance reflected the institution’s commitment to being at the forefront of digital innovation, positioning Is Bank as a global leader in leveraging cutting-edge financial infrastructure.
He further indicated that the example set by this issuance could serve as a valuable reference point for other institutions seeking to incorporate blockchain into their capital market operations.
IFC Backs Blockchain-Driven Accessibility
From the perspective of the IFC, Managing Director Makhtar Diop viewed the transaction as a pioneering step in financial technology for Türkiye. He remarked that the use of blockchain in this context represented a novel milestone and underscored its potential to make financial resources more accessible and efficient. Diop added that this kind of innovation could help direct essential funding to those most in need, particularly in regions undergoing recovery after major disasters.
By launching the country’s first digitally native bond backed by blockchain, Is Bank has signaled its intent to redefine traditional banking norms while addressing urgent societal needs. The initiative is expected to inspire further experimentation with decentralized financial tools, opening doors for more inclusive and resilient financial systems in the future.
