Türkiye’s Earthquake Recovery Gets Boost Via $100m Digital Bond

• $100 million investment to support small businesses, farmers, and entrepreneurs.
• The bond marks IFC’s first ever investment in a digitally native note and the first issuance by a private bank in an emerging market, aimed at promoting digital innovation in finance.

Istanbul, Türkiye, June 30, 2025— Türkiye İş Bankası A.Ş. (İşbank), the largest private bank in the country, has received a $100 million investment from IFC for its digitally native note (DNN) issuance. This investment marks the first DNN issuance in Türkiye and the first by a private bank in an emerging market, underscoring IFC's commitment to promoting innovative financing solutions in these regions.

A DNN is a bond or note, that is issued and settled entirely on a digital platform using distributed ledger technology (DLT). This allows for secure, decentralized record-keeping and facilitates the issuing, trading, and settlement of digital securities similarly to conventional bonds. Notably, this DNN offers T+0 settlement, meaning transactions are settled on the same business day they are executed, which significantly enhances efficiency of financial transactions and reduces settlement risk.

Proceeds from the note, issued through Euroclear’s Digital Financial Market Infrastructure (D-FMI) in collaboration with Citi as dealer and issuing and paying agent, will be used to help accelerate recovery in Türkiye’s eleven earthquake-affected provinces by expanding access to finance for small businesses, farmers, and entrepreneurs.

“This transaction is a testament to the Turkish banking sector's ability to access international financial markets, reflecting its maturity and rapid adaptation to new technologies,” said Hakan Aran, CEO of İşbank. “It underscores İşbank's pioneering role in driving innovation, particularly by setting a precedent for the use of blockchain in capital market transactions. We are delighted to lead in fostering new financial instruments through ongoing technological progress. Beyond the innovation, our motivation is further strengthened by the fact that the funds will support Türkiye’s eleven earthquake-affected provinces.”

“This investment marks an important milestone in financial innovation — Türkiye’s first digital bond,” said Makhtar Diop, Managing Director of IFC. “Issued on a blockchain platform, the bond is set to deliver timely working capital to thousands of businesses affected by the earthquakes. By using new digital technology in the bond market, we’re making financing more accessible and channeling critical capital to the entrepreneurs who need it most to rebuild and recover.”

This investment is part of the World Bank Group's efforts to support earthquake recovery, while also creating new development opportunities in Türkiye.

The transaction builds on the World Bank Treasury’s experience in issuing and purchasing DNNs, helping ensure best practices and seamless technological integration. It is also expected to encourage other issuers in emerging markets to adopt DNNs, contributing to increased competitiveness in debt capital markets.

By enhancing access to capital, reducing issuance costs, and improving transparency through easily accessible verified records, digital bonds and other forms of DLT have the potential to lower post-issuance transaction costs, broaden investor accessibility, and enhance market liquidity, demonstrating the World Bank Group’s dedication to pioneering transformative financial solutions for our clients.