Société Générale successfully executes collateralized market transaction with Banque de France, using digital securities and CBDC on blockchain.

Société Générale, France‘s third largest bank by total assets after BNP Paribas and Crédit Agricole, has completed a blockchain-based repo transaction with the Banque de France, the national bank of France.

In a Dec. 13 press release, the French bank said the deal involved bonds issued on the Ethereum (ETH) blockchain, which were used as collateral in exchange for central bank digital currency from the Banque de France.

According to the announcement, this is the first repo transaction with a central bank using digital securities, showcasing how blockchain technology can facilitate interbank operations such as refinancing. It also emphasizes the potential of CBDCs to enhance liquidity in digital financial markets.

“Société Générale deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange of CBDC issued by the Banque de France on its DL3S blockchain.”

Société Générale

The transaction follows Société Générale’s recent move into blockchain with its digital green bond issue. In December 2023, the bank issued nearly $11 million in senior preferred unsecured bonds on the Ethereum blockchain, fully subscribed by AXA Investment Managers and Generali Investments. AXA Investment used Société Générale’s euro-denominated stablecoin, EUR CoinVertible, for the purchase, with proceeds allocated to environmental projects.

The latest repo transaction was led by Société Générale’s subsidiary SG-FORGE, founded in 2018 to support the issuance, management, and settlement of digital assets, the bank said in the press release.