Société Générale (SocGen), France's third-largest listed bank, made its foray into blockchain-based financial solutions by issuing its first digital green bond, worth €10 million, on a public blockchain, according to a report from the 4 from December. Press release.
Following the European Investment Bank's (EIB) recent launch of digital bonds 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 issue not only highlights the growing confidence 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 public ethereum blockchain on November 30.
The issue was structured as a senior unsecured senior bond with a three-year maturity. Bond proceeds are allocated to financing or refinancing activities that align with Societe Generale's Positive and Sustainable Impact Bonds framework.
AXA Investment Managers and Generali Investments, representing two major institutional investors, fully subscribed for the bond through a private placement. Notably, AXA IM participated in the transaction using Societe Generale's euro-denominated stablecoin, EUR CoinVertible, for a significant portion of the investment.
Settlement via digital currency
According to the French lender, one of the notable aspects of the digital green bond is the increased transparency and traceability of ESG data, which is made possible thanks to 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 underlines 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 growing demand for digital assets, particularly those with ESG considerations.
