🌎 Societe Generale Executes Blockchain Repo Transaction

Société Générale, France’s third-largest bank by total assets, has successfully executed a collateralized market transaction with the Banque de France, utilizing digital securities and central bank digital currency (CBDC) on a blockchain platform.

Transaction Details

The transaction, announced on December 13, involved bonds issued on the Ethereum blockchain, which were used as collateral in exchange for CBDC from the Banque de France. This marks the first repo transaction with a central bank using digital securities, demonstrating the potential of blockchain technology to facilitate interbank operations, such as refinancing.

Enhancing Liquidity in Digital Financial Markets

The use of CBDCs in this transaction highlights their potential to enhance liquidity in digital financial markets. As stated by Société Générale, “Société Générale deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange of CBDC issued by the Banque de France on its DL3S blockchain.”

This transaction follows Société Générale’s recent move into blockchain with its digital green bond issue. In December 2023, the bank issued nearly $11 million in senior preferred unsecured bonds on the Ethereum blockchain, fully subscribed by AXA Investment Managers and Generali Investments.

Key Takeaways

Tips for investors and financial institutions:

Blockchain technology can facilitate interbank operations, such as refinancing.
CBDCs have the potential to enhance liquidity in digital financial markets.
Digital securities can be used as collateral in repo transactions with central banks.