This Friday, Société Générale – FORGE and the Banque de France announced a major first, through a repo operation on the blockchain. What does this type of operation consist of?
Société Générale – FORGE and the Banque de France continue their work on blockchain
Among the large French commercial banks, Société Générale is probably the most active in blockchain technologies, in particular through its subsidiary SG-Forge. In this continuity, the bank announced today that it had carried out an unprecedented on-chain operation, in partnership with the Banque de France.
In this case, it is a “ Sale and repurchase agreement », or a so-called repo operation. In effect, it is an agreement in which one of the two parties exchanges collateral such as bonds in order to obtain liquidity, with the promise of repurchasing this collateral later.
In the present case, this operation concerns tokenized bonds exchanged for central bank digital currency (CBNC):
Société Générale has deposited as security with the Banque de France bonds issued in 2020 on the public Ethereum blockchain in exchange for Central Bank Digital Currency (MNBC) issued by the Banque de France on its DL3S blockchain. This transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It further illustrates the potential of a Central Bank Digital Currency to improve the liquidity of digital financial securities.
Through this transaction, we see an additional use case in terms of asset tokenization. In terms of wholesale MNBC more specifically, this also reflects the progress of work on the digital euro, as well as the compatibilities that may exist between different networks.
👉 Also in the news — BNP Paribas, supported by the Banque de France, carried out exchanges of tokenized assets on the blockchain
Concerning the Banque de France's DL3S blockchain, it comes from a partnership with IBM, relying in particular on HyperLedger Fabric technology.
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Since 2021, I have devoted my free time to seriously educating myself on cryptocurrencies in order to acquire maximum knowledge and credibility. I often have the opportunity to conduct interviews with influential figures in the blockchain industry. I also conduct in-depth analyzes on Web3 themes to offer exclusive content to Cryptoast readers.
Vincent Maire
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