Société Générale’s SG-FORGE issued the first U.S. blockchain bond linked to SOFR, paving the way for onchain tokenization in capital markets.
Société Générale’s dedicated crypto arm, SG-FORGE, has completed a monumental transaction in the United States. This is the first blockchain-based digital bond issuance by the bank in the U.S. That is why SG-FORGE is extending its large footprint in the rapidly evolving on-chain capital markets.
Broadridge Tokenization Enables Instant On-Chain Settlement
The recently issued short-term bond is linked to the Secured Overnight Financing Rate (SOFR). Trading firm DRW bought the floating rate securities. This issuance is a ground-breaking digital securities offering to investors in the United States.
The transaction takes advantage of the Canton Network, a privacy-enabled specialized infrastructure. Digital Asset first created the network for institutional finance purposes. What Canton does is leave room for instant settlement without interfering with the legal framework of traditional markets.
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Broadridge Financial Solutions was the provider of core tokenization technology for the deal. This is the first time its new capability has been used for a live issuance. Broadridge made the token issuance possible in digital and compliant form.
Horacio Barakat, Head of Digital Innovation at Broadridge hailed the development. He mentioned the evolution of tokenization outside of U.S. Treasury bonds. Therefore, corporate and structured bonds now can be digitized.
Tokenization Expansion Secures U.S. Digital Asset Footprint
Broadridge’s capability encapsulates critical features into the digital security. These capabilities are referred to as credential management and direct investor ownership. In addition, secure and resilient security features, operational resilience and high governance standards are guaranteed through the platform.
The short-term securities, which were SOFR-indexed, were acquired by a trading company called DRW. The bonds are the first to use this new tokenization service. As a result, the transaction allows for new use cases in collateral and financing.
Société Generale has been selling digital bonds in Europe since 2019. However, this landmark transaction formally opens the door to the huge U.S. markets. It is extending the digital asset capabilities of the bank.
On the other hand, the Canton Network provides for instant settlement with privacy. This foundation serves as a way to pave the way for future tokenized asset issuances. Specifically, the bank said it could result in more complicated products such as structured notes.
Both SG-FORGE and Broadridge used IntellectEU’s Catalyst Blockchain Manager. They operated their respective nodes on the secure Canton Network. BNY Mellon was also the paying agent for the registered securities.
Barakat said that institutions such as the Societe Generale are buying in to this change. The scalable and secure infrastructure for this innovation is provided by Broadridge. Ultimately, the deal demonstrated how regulated entities bring new instruments onchain.
Lastly, this successful transaction is the power of permissioned blockchain technology. It incorporates higher efficiency and transparency to traditional finance. Therefore, the issuance is an important step in solidarity for the future of the global capital markets.