By Staff Writer
French bank Societe Generale has jumped on the bandwagon of security token offerings by issuing the first covered bond as a security token on Ethereum blockchain, according to a press release.
The move comes as the security token industry, digitized securities issued on blockchain, is gaining increasing traction in the financial industry and big banks also embrace innovation as part of their various FinTech programs.
On 18 April 2019, Societe Generale issued EUR 100m of covered bonds (“obligations de financement de l’habitat” or “OFH”) as a security token, directly registered on the Ethereum blockchain. OFH Tokens have been rated Aaa / AAA by Moody’s and Fitch and have been fully subscribed by SG.
“This live transaction explores a more efficient process for bond issuances,” said the statement, and also “reduces cost and the number of intermediaries” while making way for a more transparent and faster clearing and settlement.
This operation is the first pilot project developed by Societe Generale and Societe Generale FORGE, one of the 60 internal startups launched via the Internal Startup Call, the Group’s intrapreneurial programme. This startup experiments disruptive business solutions using blockchain technology to develop new digital capital market activities.
Societe Generale is already part of many initiatives in blockchain, such as we.trade, the first blockchain-based trade finance platform now available to all its corporate clients in France, or the launch of komgo SA to digitalise the trade and commodities finance sector through a blockchain based open platform, the statement said.