While banks have been actively exploring the many options offered by cryptocurrencies and, more broadly, by blockchain technology, there has been a notable uptick in interest and adoption throughout 2023. The trend is particularly noticeable among European banks.
France’s third-largest bank, Societe Generale, became the latest to further the trend on December 4 as it unveiled the launch of its first-ever digital green bond. The bond has been registered directly by the company as a Security Token on the Ethereum (ETH) blockchain.
It is a €10 million senior preferred unsecured bond and has a maturity of 3 years. Societe Generale explains that not only does the placing of the bond on the blockchain boost its fluidity, transparency, and transaction speed, but is also meant to serve as the first step in the drive to use blockchain technology as a certification tool and a data repository.
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Growing institutional blockchain adoption
Societe Generale is neither the first nor alone in its efforts. In February 2023, for example, the government of Hong Kong issued its own $100 million tokenized green bond as part of its effort to further improve its digital assets framework – both in terms of infrastructure and regulation – while simultaneously promoting sustainable development of the city.
Various other European banks have also been increasingly focused on improving their cryptocurrency-related capabilities. German banks have been particularly active in this regard, with multiple companies – including the $1.4 trillion giant Deutsche Bank – seeking relevant permits from the government and others like DZ Bank becoming licensed crypto custodians.
As in Hong Kong, certain government institutions have been active when it comes to boosting their involvement with blockchain technology. While the Swiss city of Lugano made a significant step late in November when it integrated Polygon (MATIC) into its payment app and announced its plans to expand it to include other major blockchains.