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AXA Investment Managers and Generali Investments have recently joined the growing bandwagon of companies purchasing tokenized green bonds as the digitalization of real-world assets (RWAs) gains momentum.
According to a press release by French banking giant Societe Generale, it issued its first digital green bond as a security token on the Ethereum blockchain.
The tokenized security token registered as SG-FORGE came with a 10 million Euro ($10.8 million) price peg during its official launch on November 30, 2023.
Now, Societe Generale has revealed that AXA Investment Managers and Generali Investments have fully subscribed through a private placement.
Generali Investments also participated in the operation with Axa IM
In an interview with @gregory_raymond & @Louis_Tellier, the CEO of Société Générale-Forge, Jean Marc Stenger, had mentioned this type of operations https://t.co/cExULhoJR5
— Raphaël Bloch (@Raph_Bloch) December 4, 2023
Providing details behind the tokenization of its green bonds, Societe Generale stated that it is geared towards increasing transparency and traceability as well as improving fluidity and speed in transactions and settlement.
The RWA green bonds are described as unsecured with a maturity window of three years. Upon reaching the majority window, the net proceeds will be allocated to finance the banking giant’s Eligible Green Activities, as defined in its Sustainable and Positive Impact Bond framework.
While acknowledging the onboarding of key institutional investors like AXA and Generali as a commendable achievement, Societe Generale emphasized that it is only a first step towards leveraging blockchain technology as a data repository to track ESG impact on a global scale.
Zooming in on its RWA green bonds, Societe Generale said it comes designed with two key innovations.
Firstly, a 24/7 data and reporting portal that provides real-time information on the digital bond infrastructure via the stated smart contract.
This portal will enable investors and issuers to measure the carbon emissions of their securities on the financial infrastructure.
The second innovation is an on-chain securities claiming solution named EUR CoinVertible, targeted as a complementary cash settlement solution.
Societe Generale also revealed that the on-chain securities claiming hub could be a testing ground for state-backed central bank digital currencies (CBDCs) such as the digital euro.
According to the financial institution, SG-FORGE’s fluidity shows its versatility to tackle real-world needs in the fast-growing decentralized economy.
SG-FORGE Marker for Growing RWA Needs
Societe Generale has been a forerunner in the Positive Impact Bonds movement focused on the environment since 2015.
The French bank has since transmuted its vision into the burgeoning blockchain ecosystem, allowing ESG-minded investors and companies to tap into green bonds and join the movement for a more sustainable future.
However, Societe Generale is not alone in exploring the possibilities of RWA tokenization. On November 30, US banking giant JPMorgan Chase captured global attention by tokenizing funds and company shares.
This experimental effort leveraged the bank’s Onyx blockchain in collaboration with Axelar Network, Apollo Global, Provenance Blockchain Found (PBF), and digital securities infrastructure firm Oasis Pro.
5⃣ J.P. Morgan & Apollo@axelarnetwork connected Onyx by @JPMorgan systems to on-chain shares in @apolloglobal funds tokenized by @provenancefdn & @Oasis_Pro_ .
The result: Automated portfolio management proof-of-concept with tokenized assets & auto-rebalancing across networks.
— Axelar Network (@axelarnetwork) November 30, 2023
Through this initiative, JPMorgan and its partners successfully tokenized RWAs and automatically rebalanced digital funds across all supported networks.
This move signifies a growing awareness among legacy-backed financial institutions of the huge potential inherent in blockchain tech and the transformative possibilities it offers for reengineering financial processes.
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