Societe Generale Uses Blockchain Platform to Issue Tokenized Bonds


In one of the encouraging developments, Societe Generale has issued $112 million worth of tokenized bonds on the blockchain platform of Ethereum. Just so you know, Societe Generale is among the largest financial institutions in France and this step is sure to encourage others to follow in bank’s footsteps. Giving specific details of the development, the announcement made in this regard said that SFH – a subsidiary of Societe Generale – issued “OFH Tokens” which, in turn, covered by the bonds having worth of $112 million.

Merits of Blockchain Platform

Highlighting the importance and merits of issuing bonds on the blockchain platform, Societe Generale said that it will allow greater transparency during the issuance process and ensures that issuing process takes place without any kind of time lag; thereby enhancing the overall efficiency of the system. This new method also eliminates the use of intermediaries which would have other otherwise made the process more cumbersome, costly, and lengthy in nature. By issuing the bond of the blockchain platform, the bank has laid out new standards for the bond trading market that will encourage other institutions to take a similar approach.

Specific Details

It is important to know that Societe Generale is the “sole investor” involved in the process which essentially means that no token sales will be permitted outside the company. This information was released by investor services wing of Moody. The planning and implementation responsibility of the project was on the shoulder of Societe Generale FORGE which is an internal startup of the company. In order to consult on the technical and legal issues, Societe Generale has availed the services of PwC and Gide Loyrette Nouel respectively.

Overall Scenario

Many banking and financial institution around the globe have started experimenting with the blockchain platform for offering new services or even the same old services in new packaging. JP Morgan couple of months ago has announced the launch of its own cryptocurrency, JPM Coin while blockchain technology firm R3 was joined by Royal Bank of Scotland and Barclays Bank to develop a blockchain-based solution for streamlining their purchase of real estate assets. This trend is expected to catch up with the rest of the industry too as blockchain dealings are becoming increasingly more popular with all stakeholders owing to their speed, accuracy, and secured nature of transactions. Once we have more clarity about the institutional framework and compliance requirements, the adoption of blockchain platforms is going to intensify further. This new development also points towards the increased risk-taking abilities of companies which are now more open to innovation and using new methods to accomplish the conventional business processes with greater time and cost efficiencies.

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