Société Générale, one of France's largest banks, issued its first digital green bond on a public blockchain. With this initiative, the financial institution aims to expand its services into the field of crypto offers.
According to the press release, the first transaction is structured as a €10 million senior preferred unsecured bond with a 3-year maturity. AXA Investment Managers, the investment arm of France's largest insurance company AXA, and Generali Investments, the investment arm of Italian insurer Generali, have fully subscribed to the corresponding security tokens through a private placement.
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Green bonds on the blockchain
For private investors, the main use case of blockchain is the investment of cryptocurrencies, alternative currencies based on a decentralised ledger technology (DLT). While traditional financial institutions are also embracing digital assets, their focus remains on the tokenisation of conventional assets such as stocks, commodities, bonds or other securities represented as tokens on the blockchain. Société Générale wants to use this technology for a digital green bond.
Green bonds are financial instruments issued by governments, companies or institutions to raise capital for projects and initiatives with positive environmental impact. They support environmentally friendly projects and are usually labelled "green" to appeal to socially responsible investors. AXA's investment arm invested in the digital green bond using Société Générale's euro stablecoin, EUR CoinVertible (EURCV).
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SocGen: Vorteile einer Digitalanleihe
According to Société Générale, the digital green bond includes two major innovations which will also be further developed. For one, information on the carbon footprint of the digital bond infrastructure is directly available 24/7 in the bond's smart contract and is freely accessible. This allows issuers and investors to measure the carbon emissions of their securities within the financial infrastructure.
On the other hand, the EURCV stablecoin offers investors a new option for securities settlement. While experiments with digital central bank currency (CBDC) solutions are underway, the various settlement methods are intended to showcase Société Générale's ability to provide the full range of on-chain services. Blockchain research by the CVJ.CH editorial team was able to trace the EURCV transactions using the Etherscan block explorer. However, the smart contract of the digital green bond itself was not identified.
