The third-largest listed bank in France, Societe Generale, announced on Monday that it had issued its first “digital green bond” on a public blockchain as part of its efforts to gain experience in the cryptocurrency space.
According to the bank, the first deal involves senior preferred unsecured notes with a three-year maturity valued at 10 million euros ($10.87 million).
The relevant security tokens were fully subscribed through private placement by AXA Investment Managers, the investment division of the largest insurance firm in France, and Generali Investments, its equivalent for the Italian insurer Generali, according to SocGen.
A blockchain is an electronic ledger that tracks token ownership. Although supporters claim it hasn’t been widely adopted, it might improve the efficiency and transparency of trading.
To date, cryptocurrency has been the primary application of blockchain technology. However, banks are spending more and more money creating tokenized securities, sometimes referred to as digital assets or security tokens. The goal is to develop tokens based on blockchain technology that stands in for ownership of conventional financial instruments like bonds.
The goal of green bond proceeds is to fund environmentally beneficial initiatives or projects, like low-carbon transportation and renewable energy.
To invest in the digital green bond, AXA IM first purchased EUR CoinVertible, SocGen’s stablecoin priced in euros, and then spent 5 million euros on it.
The European Investment Bank (EIB), in collaboration with Goldman Sachs Bank Europe, Santander, and SocGen, launched its second euro-denominated digital bond on a private blockchain last week. This bond issue by SocGen was conducted on the Ethereum public blockchain.
SocGen used its cryptocurrency division, Forge, to issue its digital green bonds.
