Societe Generale issues €10M digital green bond on Ethereum

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Société Générale (Soc­Gen), France’s third-largest list­ed bank, made its for­ay into blockchain-based finan­cial solu­tions by issu­ing its first dig­i­tal green bond — amount­ing to €10 mil­lion — on a pub­lic blockchain, as per a Dec. 4 press release.

Fol­low­ing the Euro­pean Invest­ment Bank’s (EIB) recent dig­i­tal bond launch on a pri­vate blockchain, the French lender’s ini­tia­tive marks anoth­er step towards the wide­spread adop­tion of blockchain tech­nol­o­gy in the glob­al finan­cial sector.

The issuance not only high­lights the grow­ing trust in blockchain as a dis­rup­tive tool for sus­tain­able finance but also sig­nals the increas­ing dig­i­tal­iza­tion in the finan­cial sector.

Green bond on Ethereum

SocGen’s cryp­to unit SG-FORGE issued the bond as a secu­ri­ty token on the Ethereum pub­lic blockchain on Nov. 30.

The issuance was struc­tured as a senior pre­ferred unse­cured bond with a three-year matu­ri­ty. The bond’s pro­ceeds are des­ig­nat­ed for financ­ing or refi­nanc­ing activ­i­ties that align with Soci­ete Generale’s Sus­tain­able and Pos­i­tive Impact Bond framework.

AXA Invest­ment Man­agers and Gen­er­ali Invest­ments, rep­re­sent­ing two major insti­tu­tion­al investors, ful­ly sub­scribed to the bond through a pri­vate place­ment. Notably, AXA IM engaged in the trans­ac­tion by uti­liz­ing Soci­ete Generale’s euro-denom­i­nat­ed sta­ble­coin, EUR Coin­Vert­ible, for a sig­nif­i­cant por­tion of the investment.

Settlement through digital currency

Accord­ing to the French lender, one of the notable aspects of the dig­i­tal green bond is the enhanced trans­paren­cy and trace­abil­i­ty of ESG data, which is made pos­si­ble through blockchain technology.

The dig­i­tal green bond intro­duces key fea­tures to the finan­cial mar­ket. First, it pro­vides con­tin­u­ous access to data on the car­bon foot­print asso­ci­at­ed with the dig­i­tal bond infra­struc­ture through its smart con­tract. This allows for effec­tive mon­i­tor­ing of the envi­ron­men­tal impact of finan­cial securities.

Sec­ond­ly, the bond offered an inno­v­a­tive set­tle­ment method using EUR Coin­Vert­ible, a dig­i­tal asset issued by SG-FORGE in April 2023, along­side tra­di­tion­al cash set­tle­ment options.

The issuance under­scores SocGen’s strate­gic focus on devel­op­ing exper­tise in cryp­to ser­vices and dig­i­tal instru­ments. It also demon­strates the lender’s com­mit­ment to enhanc­ing its debt cap­i­tal mar­ket capa­bil­i­ties to meet the grow­ing demand for dig­i­tal assets, par­tic­u­lar­ly those with ESG considerations.

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