Societe generale subsidiary issues tokenized bond on Ethereum blockchain

April 24, 2019, | AtoZ Markets French investment bank Societe Generale SFH issues tokenized bond on the Ethereum blockchain. The company announced issuing tokenized bond as a security token.  

Investment bank issues over $100 million tokenized bond

Societe Generale Group is one of the largest financial institutions in France. The firm’s subsidiary Societe Generale SFH, as the company’s announcement, says, issued OFH tokens which are backed by covered bonds in the amount of 100 million euros.  

The company in its press-release outlined, that “this live transaction explores a more efficient process for bond issuances “ and “ proposes a new standard for issuances and secondary market bond trading and reduces cost and the number of intermediaries.

Societe Generale Group is “the sole investor” of the project

To ensure the successful development of its first project, one of the largest investment banks in France has partnered with Societe Generale FORGE – an internal startup launched through the Group’s intrapreneurial program, the Internal Startup Call. Along with collaboration with Societe Generale FORGE, the firm also consulted with PwC on the technical aspects and French law firm Gide Loyrette Nouel on legal aspects.

It is worth noting, that rating agency Moody’s Investors entitled Societe Generale as the only investor of the tokenized bond issuance on the Ethereum blockchain. This means that the tokens were not sold outside the company.

Societe Generale started its way into the blockchain sphere back in September last year when it established a joint venture called komgo SA to monitor the blockchain-based platform to finance merchandise trade.

The goal of the new enterprise, which was developed in collaboration with the ConsenSys group, is the digitization of trade and commodity financial processes through an open platform based on Ethereum blockchain.

Earlier in April, another Societe General subsidiary, a private bank Kleinwort Hambros, issued a stock exchange bond. According to reports, the shares included 20 companies that are expected to profit from the introduction of the blockchain and the distributed book.

Banks become less suspicious toward the blockchain technology

In one of his recent interviews, Emmanuel Aidoo, head of the digital assets department at Credit Suisse, said that the desire of financiers to maintain the status quo is holding back the adoption of the blockchain technology.

Aidoo noted that the reluctance of banks to accept the blockchain is associated with culture within banks and has nothing to do with the immaturity of technology or the lack of potential use cases in financial institutions.

Despite that, it seems like even banks are changing their negative and suspicious attitude toward blockchain into something more friendly. Societe Generale recent announcement could be considered as an example of that. The company is one of many financial institutions which joined the group of large firms interested in the blockchain technologies and cryptocurrencies.

Earlier this year, the US-based J.P. Morgan announced the launch of a proprietary digital coin JPM Coin, World Bank, and the International Monetary fund have recently launched a private blockchain and quasi-cryptocurrency.

In March 2019 Six international banks signed letters of intent to introduce their stablecoins via IBM Blockchain payment network the ‘World-Wire.’ It gives a hint that the blockchain technology has probably come to the finance industry to stay.

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