French bank Société Générale has used the Ethereum blockchain to issue its first digital “green bond,” worth €10 million.
The digital green bond, with a 3-year maturity, was issued by its subsidiary Forge as a security token on the Ethereum blockchain, the bank said in a statement. releaseThe bond has also been fully subscribed by AXA Investment Managers and Generali Investments, two leading institutional investors.
In issuing this bond, Société Générale highlighted the advantages of blockchain technology to promote Transparency and traceability in ESG and to increase the Investor accessibility to the bond market.
The bank noted that the underlying technology of Bitcoin and cryptocurrencies has differentiating features that allow carbon footprint information linked to the digital bond infrastructure to be always available, 24 hours a day, 7 days a week. According to the bank, this helps facilitate open access so that both issuers and investors can effectively measure the carbon emissions of their securities.
Blockchain, synonymous with transparency and traceability
For Société Générale and for a large part of the world's financial institutions, blockchain technology is synonymous with Transparency, traceability, efficiency and cost savings.
According to the French bank, being based on blockchain, the green bond has a digital format that “allows for greater transparency, as well as greater fluidity and speed in transactions and settlements.”
Société Générale has been dabbling in the blockchain world for some time now. To date, the bank has issued Eurobonds using the Ethereum blockchain and security tokens on the Tezos network. On the latter blockchain, Société Générale is also testing the Development of a central bank digital currency (CBDC), through its subsidiary Forge.
Regarding the issuance of its first digital green bond, Société Générale highlighted that this is a step forward in its commitment to harness the potential, innovation and technological capabilities of blockchain in the financial sector and combine all this with its extensive experience in financial structuring, in order to offer its investors modern and attractive alternatives to explore the growing digital assets sector.
“This transaction is a new example of the innovative services developed by Société Générale in the field of digital instruments”, the bank said in the statement.
Digital green bonds, a sector with great growth potential
In addition to the French bank, Spanish bank BBVA has also used blockchain to issue digital green bonds.
Together with the Spanish multinational Mapfre, BBVA announced the launch of its first structured green bond, worth 35 million euros and with a 6-year maturity, using blockchain technology.
The Bank for International Settlements (BIS) and the Hong Kong Monetary Authority also experimented with blockchain for issuing green bonds digital versions, as part of the Genesis project, which also involved the United Nations (UN). Through Genesis, the entities sought to demonstrate how blockchain can be used to increase transparency and reduce risks in the bond market, while exploring the technical feasibility of issuing digital versions of green bonds.
Continue reading: Banks use blockchain to tokenize assets and infrastructure projects
