Societe Generale Issues 100mln Covered Euro Bond As Security Token on Ethereum Blockchain
French sophisticated credit organization Societe Generale SFH released a €100 million ($ 112 million) bond on the Ethereum (ETH) blockchain. The company reported the activity on April 23.
Societe Generale SFH— a wholly owned institution of one of Europe’s largest financial services groups, Societe Generale Group — has introduced its first trial venture built in partnership with Societe Generale FORGE. SFH is an internal software company established through its intrapreneurial scheme, the Internal Startup Call.
Societe Generale SFH released EUR 100 million of covered bonds (“obligations de financement de l’habitat” or “OFH”) as a security token solely on the Ethereum blockchain. OFH Tokens were rated Aaa / AAA by Moody’s and Fitch and totally acquired by Societe Generale.
This operation is the first trial venture built by Societe Generale and Societe Generale FORGE, one of 60 internal startups established through Internal Startup Call, the intrapreneurial scheme of the Group. The start-up trials with path breaking business solutions that use blockchain technology to establish unique digital market practices. This live dealing explores an effective bond allocating process.
Many value-added sectors are forecast including product scalability and lowered time-to-market, programming code automation streamlining, improved accountability, quicker transferability and settlement. It recommends a unique issuance and secondary-market bond buying and selling standard and lowers the cost and middlemen.
The process was made feasible by the Bank’s Finance, Legal, Compliance and Operations teams. Gide Loyrette Nouel was hired as legal counsel to the OFH Token issuer and PwC France, and francophone Africa as a blockchain consultant. The transaction’s objective was to examine a more cost effective way of issuing bonds, possibly facilitating better openness and quicker transferability and settlement. In the announcement, the firm says the product “proposes a new standard for issuances and secondary bond trading and reduces costs and intermediaries.”
In the sector of blockchain and distributed ledger technologies, Societe Generale has been active with numerous measures for several years, like we.trade, the very first blockchain-based trade funding platform now accessible by all its corporate customers in France, or the establishment of komgo SA to computerize the trade and commodity finance industry through a blockchain-based open source platform.
Last September, Societe Generale turned out to be one of the major financial institutions launching a partnership named komgo SA to supervise a new, blockchain-based open source framework to finance commodity trading. The platform was built with the Ethereum-focused blockchain framework and solutions group ConsenSys.
Back in April, Societe Generale-owned private bank Kleinwort Hambros introduced an exchange-traded note consisting of blockchain-related firms. Reportedly, the stocks comprises of 20 firms, anticipated to benefit from the implementation of blockchain and distributed ledger technology.
Specifically, Credit Suisse’s chief of digital market assets, Emmanuel Aidoo, said the financial’s desire to preserve the status quo hampers blockchain technology. Aidoo contended that banks’ unwillingness to adopt blockchain lies within banks ‘ culture, and had nothing to do with both the naivety of the innovation and absence of prospective instances of use within financial institutions.