Societe Generale Forge (SocGen Forge), the digital assets arm of the big French bank, received a digital assets license at the end of September. That’s according to the French securities regulator, Autorité des Marchés Financiers, which published an updated list of companies with licenses last week, as first reported by The Block.
The SocGen division is best known for taking a leading role in the issuance of the €100 million ($98m) European Investment Bank bond.
The license includes custody, purchase/sale of digital assets for legal tender and the trading of digital assets against other digital assets. The company signed a deal with digital asset custody technology provider Metaco in late June. Caisse des Depots, the state-owned bank, received a digital asset custody license a year ago.
Rather than cryptocurrencies, SocGen Forge is squarely focused on tokenized financial assets such as stocks and bonds. This was confirmed last week by the company’s deputy CEO David Durouchoux, referring to them as security tokens of MiFID securities. He said it envisages the role of tokenizing real world assets, such as real estate, being executed by specialist asset managers and fintechs.
Where other institutions lean towards permissioned ledger, SocGen Forge is interested in public blockchains. Durouchoux outlined the benefits, including public blockchains being accessible worldwide and the pay-per-use nature rather than having a heavy upfront investment. For clients, the advantages are automation and to provide value added services.
Durouchou mentioned the ability to use digital instruments as collateral. That’s something it’s exploring with the MakerDAO protocol.
During 2020, as part of a French wholesale CBDC experiment, Forge was responsible for helping the main bank issue a €40m covered bond on the Ethereum blockchain. It’s now exploring refinancing by taking out a $30 million loan in the DAI stablecoin with the tokenized covered bonds as collateral. SocGen Forge would lend the money to the main bank.
From MakerDAO’s perspective, it wants to diversify the assets supporting its stablecoin. It recently entered into a $100m funding of loan participations with US-based Huntingdon Valley bank.
