Investors of the digital green bond now have the option of settling the transaction through on-chain EUR CoinVertible, a digital asset that was issued by SG-FORGE earlier this year.
Leading multinational financial services provider based in Paris Societe Generale SA (EPA: GLE) has announced the launch of its first digital green bond that is issued on blockchain technology. According to the announcement, the security token has been directly registered by SG-FORGE on the Ethereum (ETH) network. To kickstart the private funding through the blockchain security bonds, Societe Generale announced that two of its top tier investors, AXA Investment Managers and Generali Investments. The company indicated the importance of tapping on blockchain technology to ensure utmost transparency in private funding through blockchain-based bonds.
“This transaction is the first digital green bond issued by Societe Generale to leverage blockchain’s differentiating functionalities. This digital format enables increased transparency and traceability as well as improved fluidity and speed in transactions and settlements,” the company noted.
Notably, the blockchain-based digital green bond by Societe Generale is a £10 million senior preferred unsecured bond with a maturity of three years. As a result, an amount equivalent to the unsecured bond will be used to fund eligible green activities that are identified by the Sustainable and Positive Impact Bond framework2 of Societe Generale.
Furthermore, the company’s digital green bond taps on Ethereum smart contracts to ensure utmost transparency on carbon footprint on information linked to digital bond infrastructure. Investors of the digital green bond now have the option of settling the transaction through on-chain EUR CoinVertible, a digital asset that was issued by SG-FORGE earlier this year.
Why Societe Generale Chose the Ethereum Network
The meteoric growth of the Ethereum network since its inception about a decade ago has attracted notable attention from both retail and institutional investors. As a result, the Ethereum network has registered significant increases in decentralized financial (DeFi) platforms with a total value locked (TVL) of more than $28 billion. As for the regulatory clarity, the Ethereum network cleared most of the hurdles after the merge event, which transitioned the mainnet from the proof-of-work (PoW) to the proof-of-stake (PoS). Moreover, the PoS consensus mechanism is much more environmentally friendly than the power-consuming mining infrastructure.
The Ethereum network has the leading daily on-chain activity that is secure for institutional investors to freely transact without compromising crucial data. As of this report, the Ethereum network leads in stablecoins market capitalization of more than $66 billion, which provides stable liquidity for deep-pocketed investors. The Ether developers have made it easy for real-world assets (RWA) tokenization through smart contracts that are multichain compatible via the Ethereum Virtual Machine (EVM).
The blockchain-based bonds have been identified as the easiest way of enabling private funding with more benefits from the European regulatory regime. Moreover, most crypto assets are prone to market manipulation, which puts most investors away.