First Interbank Refinancing Operation on Blockchain Launched in Europe

Societe Generale and Banque de France completed a transaction using tokenized bonds as collateral to secure a loan in a central bank digital currency (CBDC). All operations were entirely conducted via blockchain networks.

Financial conglomerate Societe Generale reported its first successful execution of a repo transaction solely carried out using blockchain technology. The deal involved using tokenized bonds issued in 2020 on the Ethereum blockchain as collateral for borrowing the CBDC from Banque de France. It was issued on the DL3S blockchain. This took place within the framework of interbank refinancing procedures.

In essence, a repo transaction is a short-term borrowing mechanism in which one party sells a security to another party, with an agreement to repurchase that security at a predetermined price. The security acts as collateral for a loan.

SG Forge, Societe Generale’s subsidiary, facilitated the operation, demonstrating the technical feasibility of conducting interbank refinancing operations via blockchain.

The press release highlights how integrating CBDCs can enhance liquidity in tokenized securities markets. Moreover, Societe Generale underscored its readiness to leverage its expertise in digital assets and financial structuring, helping pave the way for next-generation financial markets.

Banque de France is advancing its CBDC project since 2021, with Societe Generale playing a prominent role. The financial conglomerate is also active in the global Project Guardian, which explores commercial use cases for tokenized assets, as well as in testing a pan-European financial system underpinned by distributed ledger technology (DLT).

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