Societe Generale Issues 100M Euro Tokenized Bond On Ethereum Blockchain

Blockchain, News | April 24, 2019 By:

Societe Generale SFH, a subsidiary of French multinational investment bank Societe Generale (SocGen), has issued a 100 million euro ($112M USD) covered bond as a security token on the ethereum blockchain.

Covered bonds are debt securities issued by a bank or mortgage institution and backed by a separate group of assets; in the event the financial institution becomes insolvent, the bond is covered. Covered bonds provide an efficient, lower-cost way for lenders to expand their business rather than issuing unsecured debt instruments.

Societe Generale SFH said in a press release that the 100 million euro covered bond transaction is the first pilot project developed in partnership with Societe Generale FORGE, one of the 60 internal startups launched via the Internal Startup Call, the Group’s intrapreneurial program. Societe Generale FORGE experiments disruptive business solutions using blockchain technology to develop new digital capital market activities.

The live transaction explored a “more efficient process” for bond issuances and sees the possibility for many areas of added value, such as product scalability and reduced time to market, computer code automation structuring, thereby facilitating better transparency, faster transferability and settlement.

For several years, SocGen has been involved in numerous blockchain initiatives. The bank is one of the founding members of we.trade, a blockchain-based trade finance platform now available to all its corporate clients in France. In September 2018, the bank partnered with major financial organizations to launch a joint venture, dubbed komgo SA, to digitalize the trade and commodities finance sector through a blockchain based open platform.