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.
