Yesterday Societe Generale
announced that its subsidiary Societe Generale SFH issued a €100 million ($112m) covered bond as a security token on the public Ethereum blockchain last week.
The bonds were rated Aaa/AAA by Moody’s and Fitch and were fully subscribed by Societe Generale. In other words, this was a pilot internal group transaction.
Most banks are hesitant to use public blockchains for several reasons, mainly relating to legal and governance issues. For example, Ethereum has forked in the past into Ethereum and Ethereum Classic. In these situations, the assets live on both chains, but there may be solutions. For example, it’s conceivable that by purchasing or subscribing to a token one agrees to the issuer deciding which chain will be the “true” one in the case of a fork. This is a Ledger Insights observation, not something in the Societe Generale announcement.
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