The largest financial group of France Societe Generale has issued bonds on public Ethereum blockchain which worth’s $112 million in form of the security token. The latest development was announced through their website on the 23rd of April.
On 18th April the subsidiary of Societe Generale Group, SFH has issued 100 million Euros of covered bonds, a kind of security token that has got registered directly on the Ethereum blockchain.
The blockchain subsidiary of the financial group Societe Generale FORGE, has designed the pilot project. With this, the group has launched its first startup out of sixty. Using blockchain the startup will experiment on the disruptive business solution for virtual capital market happenings.
As per the reports of Mody’s investor services the firm has issued the bond to itself and no outsiders were involved in it. PWC is the technical advisor, and Gide Loyrette Nouel is the law advisor of the project. The financial group has said bond issuance can be more efficient if it is done live. They have further said through this more areas can be predicted which can translate into faster transaction, transparency and settlement. This also proposes a new standard for trading bonds at reduced cost and also reduces the interaction with a middleman.
The issued bond will mature after five years with twelve months grace period as described by Mody’s. The advantage of the bond is if the issuing company fails then whoever holds the bond at that time will get the payment in the same fractional amount at the same time as regular bonds.
The rating agency has also said the use of blockchain will be credit positive for the issuer as it will create transparency and will reduce errors at the same time.
In the past, Societe Generale Group has been part of many blockchain projects. It is the founder member of we.trade the IBM powered trade finance platform launched in 2017 and is also the member of Komgo SA a commodity trading platform launched in 2018.
The financial group is also a member of a large financial group involved in experimenting with blockchain technology for financial services. The company has also acquired a wealth management company Kleinwort Hambros earlier current month.
Earlier this year, the Australian government has also announced the use of Ethereum blockchain to certify the government bonds.
Startup Nivaura started denomination of bonds in ether back in 2017 for a London based startup LuxDeco.