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Societe Generale Completes Blockchain Repo Transaction with Banque de France

brian danga

Brian D

By: Brian D

Friday, December 13, 2024

Dec 13, 2024

3 min read

3 min

bitcoin with france flag
bitcoin with france flag
bitcoin with france flag
  • Societe Generale executed a repo transaction fully on a public blockchain. 

  • The development highlighted the company’s commitment to revolutionizing traditional financial markets as Web3 penetrates deeper into the mainstream arena. 

  • The transaction involved Banque de France, a member of the Eurosystem for France. 

Societe Generale announced Friday that it had completed a first repurchase agreement transaction on a public blockchain with the Banque de France, France’s central bank and a member of the Eurosystem. 

Commonly known as a repo transaction, a repurchase agreement involves a short-term deal to sell securities and repurchase them later at a predetermined price, usually higher than the initial amount. It is a form of contractual short-term borrowing with government securities like bonds issued domestically by central banks serving as collateral. Societe Generale’s blockchain-based repo transaction sets a precedent for the future of traditional finance evolution under Web3.  

Societe Generale’s Blockchain Repo Transaction 

In a press release on December 13, Societe General said it teamed up with the French central bank to execute a collateralized market transaction via its digital asset subsidiary SG-Forge. The subsidiary deposited as collateral some bonds issued in 2020 on the Ethereum blockchain in exchange for Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain. 

“This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a Central Bank Digital Currency to improve the liquidity of digital financial securities.” Societe Generale said.  

The development positions Web3 deeper into the mainstream arena as blockchain technology gains more relevance in the European repo market, which the International Capital Market Association (ICMA) estimated to be worth EUR 10.9 trillion in December 2023. 

With the added innovation that enables access to a regulated CBDC in repo transactions, financial institutions are likely to follow in Societe Generale’s footsteps and tap the numerous advantages blockchain technology presents over traditional systems in terms of speed, transparency, and security. 

Blockchain technology enables real-time settlement with minimal counterparty risk and greater operational efficiency. This makes it a go-to tool for institutions seeking to power cost-effective and highly accessible repurchase agreement transactions without intermediaries or unnecessary costs of prolonged settlement times associated with physical securities. 

According to the statement, the pioneering deal is a testament to Societe Generale’s commitment to using its financial structuring expertise and SG-Forge’s technological capabilities to foster innovation in financial markets. 

Societe General Leads the Web3 Race 

Founded in 1864, Societe Generale is a leading financial services group that serves over 25 million clients through its three complementary business lines, including French retail banking, global banking, and international retail, mobility, and leasing services. 

Societe unveiled its euro-pegged stablecoin, EUR Coinvertible (EURCV), in April 2024, three months before it became the first company to obtain a license for crypto services in France. The authorization allows it to offer a range of regulated cryptocurrency services, including digital asset trading and custody. 

The Ethereum-based stablecoin, which began to trade on the crypto exchange Bitstamp in December, has held a significant share of the burgeoning European stablecoin market since the introduction of MiCA regulations. According to a recent report by Kaiko Research, the market share of EURCV and Circle’s EURC reached an all-time high of 67% in October following Coinbase’s move to delete Tether’s USDT, the largest stablecoin by market cap, by December 30. 

In addition to its stablecoin initiative, Societe General advanced its agenda for blockchain-based financial institutions last year, issuing a EUR 10 million digital bond on the Ethereum blockchain in December. The issuance included a senior preferred unsecured bond with a three-year maturity, which AXA Investment Managers and Generali Investments fully subscribed to via a private placement. 

Like Societe, Banque de France has been involved in blockchain initiatives for years. In 2021, it joined a group of banking companies, including BNP Paribas, Credit Agricole CIB, and HSBC, to explore various CBDC use cases. 

The central bank signed a bilateral collaboration deal with the Hong Kong Monetary Authority (HKMSA) earlier this year to experiment with wholesale CBDC and tokenization applications in cross-border transactions. 

  • Societe Generale executed a repo transaction fully on a public blockchain. 

  • The development highlighted the company’s commitment to revolutionizing traditional financial markets as Web3 penetrates deeper into the mainstream arena. 

  • The transaction involved Banque de France, a member of the Eurosystem for France. 

Societe Generale announced Friday that it had completed a first repurchase agreement transaction on a public blockchain with the Banque de France, France’s central bank and a member of the Eurosystem. 

Commonly known as a repo transaction, a repurchase agreement involves a short-term deal to sell securities and repurchase them later at a predetermined price, usually higher than the initial amount. It is a form of contractual short-term borrowing with government securities like bonds issued domestically by central banks serving as collateral. Societe Generale’s blockchain-based repo transaction sets a precedent for the future of traditional finance evolution under Web3.  

Societe Generale’s Blockchain Repo Transaction 

In a press release on December 13, Societe General said it teamed up with the French central bank to execute a collateralized market transaction via its digital asset subsidiary SG-Forge. The subsidiary deposited as collateral some bonds issued in 2020 on the Ethereum blockchain in exchange for Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain. 

“This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a Central Bank Digital Currency to improve the liquidity of digital financial securities.” Societe Generale said.  

The development positions Web3 deeper into the mainstream arena as blockchain technology gains more relevance in the European repo market, which the International Capital Market Association (ICMA) estimated to be worth EUR 10.9 trillion in December 2023. 

With the added innovation that enables access to a regulated CBDC in repo transactions, financial institutions are likely to follow in Societe Generale’s footsteps and tap the numerous advantages blockchain technology presents over traditional systems in terms of speed, transparency, and security. 

Blockchain technology enables real-time settlement with minimal counterparty risk and greater operational efficiency. This makes it a go-to tool for institutions seeking to power cost-effective and highly accessible repurchase agreement transactions without intermediaries or unnecessary costs of prolonged settlement times associated with physical securities. 

According to the statement, the pioneering deal is a testament to Societe Generale’s commitment to using its financial structuring expertise and SG-Forge’s technological capabilities to foster innovation in financial markets. 

Societe General Leads the Web3 Race 

Founded in 1864, Societe Generale is a leading financial services group that serves over 25 million clients through its three complementary business lines, including French retail banking, global banking, and international retail, mobility, and leasing services. 

Societe unveiled its euro-pegged stablecoin, EUR Coinvertible (EURCV), in April 2024, three months before it became the first company to obtain a license for crypto services in France. The authorization allows it to offer a range of regulated cryptocurrency services, including digital asset trading and custody. 

The Ethereum-based stablecoin, which began to trade on the crypto exchange Bitstamp in December, has held a significant share of the burgeoning European stablecoin market since the introduction of MiCA regulations. According to a recent report by Kaiko Research, the market share of EURCV and Circle’s EURC reached an all-time high of 67% in October following Coinbase’s move to delete Tether’s USDT, the largest stablecoin by market cap, by December 30. 

In addition to its stablecoin initiative, Societe General advanced its agenda for blockchain-based financial institutions last year, issuing a EUR 10 million digital bond on the Ethereum blockchain in December. The issuance included a senior preferred unsecured bond with a three-year maturity, which AXA Investment Managers and Generali Investments fully subscribed to via a private placement. 

Like Societe, Banque de France has been involved in blockchain initiatives for years. In 2021, it joined a group of banking companies, including BNP Paribas, Credit Agricole CIB, and HSBC, to explore various CBDC use cases. 

The central bank signed a bilateral collaboration deal with the Hong Kong Monetary Authority (HKMSA) earlier this year to experiment with wholesale CBDC and tokenization applications in cross-border transactions. 

  • Societe Generale executed a repo transaction fully on a public blockchain. 

  • The development highlighted the company’s commitment to revolutionizing traditional financial markets as Web3 penetrates deeper into the mainstream arena. 

  • The transaction involved Banque de France, a member of the Eurosystem for France. 

Societe Generale announced Friday that it had completed a first repurchase agreement transaction on a public blockchain with the Banque de France, France’s central bank and a member of the Eurosystem. 

Commonly known as a repo transaction, a repurchase agreement involves a short-term deal to sell securities and repurchase them later at a predetermined price, usually higher than the initial amount. It is a form of contractual short-term borrowing with government securities like bonds issued domestically by central banks serving as collateral. Societe Generale’s blockchain-based repo transaction sets a precedent for the future of traditional finance evolution under Web3.  

Societe Generale’s Blockchain Repo Transaction 

In a press release on December 13, Societe General said it teamed up with the French central bank to execute a collateralized market transaction via its digital asset subsidiary SG-Forge. The subsidiary deposited as collateral some bonds issued in 2020 on the Ethereum blockchain in exchange for Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain. 

“This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a Central Bank Digital Currency to improve the liquidity of digital financial securities.” Societe Generale said.  

The development positions Web3 deeper into the mainstream arena as blockchain technology gains more relevance in the European repo market, which the International Capital Market Association (ICMA) estimated to be worth EUR 10.9 trillion in December 2023. 

With the added innovation that enables access to a regulated CBDC in repo transactions, financial institutions are likely to follow in Societe Generale’s footsteps and tap the numerous advantages blockchain technology presents over traditional systems in terms of speed, transparency, and security. 

Blockchain technology enables real-time settlement with minimal counterparty risk and greater operational efficiency. This makes it a go-to tool for institutions seeking to power cost-effective and highly accessible repurchase agreement transactions without intermediaries or unnecessary costs of prolonged settlement times associated with physical securities. 

According to the statement, the pioneering deal is a testament to Societe Generale’s commitment to using its financial structuring expertise and SG-Forge’s technological capabilities to foster innovation in financial markets. 

Societe General Leads the Web3 Race 

Founded in 1864, Societe Generale is a leading financial services group that serves over 25 million clients through its three complementary business lines, including French retail banking, global banking, and international retail, mobility, and leasing services. 

Societe unveiled its euro-pegged stablecoin, EUR Coinvertible (EURCV), in April 2024, three months before it became the first company to obtain a license for crypto services in France. The authorization allows it to offer a range of regulated cryptocurrency services, including digital asset trading and custody. 

The Ethereum-based stablecoin, which began to trade on the crypto exchange Bitstamp in December, has held a significant share of the burgeoning European stablecoin market since the introduction of MiCA regulations. According to a recent report by Kaiko Research, the market share of EURCV and Circle’s EURC reached an all-time high of 67% in October following Coinbase’s move to delete Tether’s USDT, the largest stablecoin by market cap, by December 30. 

In addition to its stablecoin initiative, Societe General advanced its agenda for blockchain-based financial institutions last year, issuing a EUR 10 million digital bond on the Ethereum blockchain in December. The issuance included a senior preferred unsecured bond with a three-year maturity, which AXA Investment Managers and Generali Investments fully subscribed to via a private placement. 

Like Societe, Banque de France has been involved in blockchain initiatives for years. In 2021, it joined a group of banking companies, including BNP Paribas, Credit Agricole CIB, and HSBC, to explore various CBDC use cases. 

The central bank signed a bilateral collaboration deal with the Hong Kong Monetary Authority (HKMSA) earlier this year to experiment with wholesale CBDC and tokenization applications in cross-border transactions. 

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