The cryptocurrency market has always worked with an intention to integrate with the mainstream financial ecosystem and the latest development from Societe Generale SA [SocGen] seems to have done just the same.
Latest reports have shown that a unit of the French multinational investment bank sold over 100 million euros in the form of debt backed by mortgages in the form of virtual assets, with SocGen being the only buyer. The bank did not divulge any more details regarding the massive movement. Apart from supporters, the news was also criticized by several people in the crypto-verse, including Romal Almazo, the crypto and blockchain head at Capco:
“The proliferation of tokenization within finance will occur, but don’t expect to see it go mainstream anytime soon. This market will take years to properly mature and evolve.”
Societe Generale stated that the main use of cryptocurrencies was to see the noticeable change in transactional speeds and efficiency. Societe Generale’s entry into crypto was widely covered during the weeks before the official announcement reading:
“[…] issued EUR 100 million of covered bonds in the form of “security tokens” (home financing bonds or “OFH”) directly registered on the Ethereum blockchain. Tokens OFH was rated Aaa / AAA by Moody’s and Fitch and were fully subscribed by Société Générale.”
The bank had stated that the transaction made it possible to explore a more efficient bond issue circuit. According to SocGen, the benefits include increased transparency, faster securities transfer, and settlement. It also makes it possible to offer a new standard for issue and trading in the secondary market and to reduce the costs and the number of intermediaries.
The bank had added:
“Innovation is at the heart of Société Générale’s DNA. It is a priority axis of its “Transform to Grow” strategic plan. The Group’s digital transformation is accelerating by using new technologies to innovate and better serve its customers.”
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