Societe Generale Issues First Digital Green Bond on Blockchain
The French multinational financial conglomerate, Societe Generale, has launched its inaugural digital green bond on a blockchain network. The banking group has issued nearly $11 million worth of senior preferred unsecured bonds on the Ethereum (ETH) blockchain. AXA Investment Managers and Generali Investments fully subscribed to the security tokens through private placement.
AXA Investment Acquires Societe Generale’s Stablecoin
AXA Investment has acquired €5 million worth of Societe Generale’s euro-denominated stablecoin called EUR CoinVertible (EURCV). This stablecoin will be used to fund projects focused on environmental benefits such as renewable energy and low-carbon transportation.
Societe Generale’s EURCV Stablecoin Raises Concerns
Although Societe Generale announced its EURCV stablecoin in April 2023 to bridge the gap between traditional capital markets and the digital asset ecosystem, it faced skepticism from Stasis. Stasis, the firm behind euro-pegged stablecoin EURS, highlighted potential risks and the “single point of failure” problem associated with commercial bank-issued stablecoins. Other analysts also questioned the functionality of EURCV’s smart contract, which relies on a centralized registrar controlled by the bank.
Hot Take: Societe Generale Pioneers Green Bonds on Blockchain
Societe Generale’s issuance of its first digital green bond on a blockchain network marks a significant step towards incorporating sustainability into the crypto world. By utilizing blockchain technology, Societe Generale aims to enhance transparency and traceability in green financing. However, concerns about centralized control and potential risks associated with commercial bank-issued stablecoins should not be overlooked. As more financial institutions explore digital assets for sustainable initiatives, it is crucial to address these concerns and ensure the integrity and decentralization of the blockchain ecosystem.
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