The Société Générale announced yesterday that it has successfully completed the first financial transaction settled with a Central Bank Digital Currency(CBDC).
Societe Generale SFH, the covered bond vehicle of Societe Generale, issued €40 million of covered bonds (“obligations de financement de l’habitat” or “OFH”)) as security tokens directly registered on a public blockchain.
These OFH Tokens were fully subscribed by Societe Generale which simultaneously paid the issuer in a digital form of euros (CBDC) issued by Banque de France through a blockchain platform, as also reported in the press release of Bank of France.
CBDC for the new interbank market
This experimentation was performed end-to-end using blockchain infrastructures, in accordance with best market practices. It demonstrates the feasibility of financial securities being digitally settled and delivered in Central Bank Digital Currency (CBDC) for interbank settlements.
This approach appears to be in line with the views of VISA’s Head of Crypto, Cuy Sheffield, who argued that central banks might not release their digital currency directly to consumers, on his tweet.
Banque de France had launched an experimental approach to the Central Bank Digital Currency (CBDC) in early 2020, with which it is exploring the potential role of new technologies in improving the functioning of financial markets, with a particular interest in interbank settlements.
The Banque de France is, in fact, working with some technical partners to carry out these tests, based on a DLT developed by their teams, to trial the use of a CBDC for the issuance of digital financial instruments by Société Générale Forge.
"'This test transaction carried out with the Banque de France is a new step in Societe Generale scaling up in its transformation, using the most innovative technologies, with the aim of better serving its clients." as reported in the company's press release.'