Societe Generale headquarter entrance in La Defense, Paris, France, 3 December 2014. Shutterstock
According to the bank’s press release published on 15 April, the transaction is a key step in the development of Societe Generale – Forge, a regulated subsidiary of Societe Generale Group, which aims to offer crypto asset structuring and issuing, as well as exchange and custody services to Societe’s professional clients by 2022. The security token came in the form of a €5 million Euro Medium-Term Note (EMNT), fixed debt security that expires in five to ten years.
“This new experimentation, performed in accordance with best market practices, demonstrates the legal, regulatory and operational feasibility of issuing more complex financial instruments on a public blockchain,” the bank said in the release.
The innovative operating model employed by Societe Generale – Forge enables security tokens to be directly integrated into conventional banking systems interfaced with the SWIFT format. Aside from enabling increased efficiency of financial transactions, the model also automates a significant number of corporate actions and increases transparency.
Societe Generale’s latest security token issuance marks the third consecutive year the bank has been involved in blockchain development. In April 2019, Societe Generale SFH issued €100 million of covered bonds as a security token on the Ethereum blockchain. In May 2020, the bank’s subsidiary also issued €40 million of covered bonds, this time settled in Central Bank Digital Currency (CBDC) issued by Banque de France.
Last year, the bank partnered with Ethereum software firm ConsenSys to assist in its CBDC research efforts.