Outside Source
The transaction involved tokenized bonds issued on the Ethereum blockchain as collateral in exchange for CBDC issued by the Banque de France.
News
Societe Generale has completed the first repo transaction using blockchain technology within the Eurosystem’s central bank.
According to a Dec. 13 announcement, the transaction was carried out in collaboration with the Banque de France through Societe’s subsidiary for digital assets, Forge.
A repo transaction, short for repurchase agreement, is a financial transaction where one party sells a security to another with a promise to repurchase it at a later date at a predetermined price. It is, essentially, a short-term borrowing mechanism where securities serve as collateral.
In the case of the Forge transaction, the repo involved tokenized bonds issued in 2020 on the Ethereum blockchain as collateral, while central bank digital currency (CBDC) issued by the Banque de France was exchanged as cash.
Societe Generale said the transaction demonstrates the technical feasibility of interbank refinancing operations onchain:
“It illustrates the potential of a central bank digital currency to improve the liquidity of digital financial securities.”
Securities tokenization involves converting a traditional debt instrument, like a bond, into a digital token representing its ownership. When traded in a blockchain, these tokens have an immutable record of transactions and faster settlement times compared to traditional systems.
For instance, United States debt instruments tokenized onchain by private companies reached $2.9 billion in December 2024.
Tokenized US Treasurys, bonds and cash equivalents as of Dec. 12, 2024. Source: RWA.xyz
Related: What are tokenized debt instruments? A beginner’s guide
The Banque de France has been exploring use cases for its CBDC since 2021, when it piloted a trial involving several banks in the country’s debt market, including Societe Generale, BNP Paribas, Credit Agricole CIB and HSBC.
The institution has also experimented with cross-border transactions. In 2024, the central bank signed a bilateral collaboration with the Hong Kong Monetary Authority (HKMA) for wholesale CBDC and tokenization projects.
Likewise, Societe Generale has been developing its digital assets businesses. In September, the company announced a partnership with trading platform Bitpand to expand the reach of its euro-denominated stablecoin, dubbed EUR CoinVertible (EURCV). The bank is among the world’s largest financial groups, holding nearly $1.6 trillion in total assets as of 2023.
Related: Project Guardian explained: A global initiative for asset tokenization
This article first appeared at Cointelegraph.com News
