Societe Generale offers historic $ 20 million DAI loan in exchange for bond tokens

One of the main French banks turned to the pioneer of decentralized finance MakerDAO to offer the submission of bond tokens as collateral...


One of the main French banks turned to the pioneer of decentralized finance MakerDAO to offer the submission of bond tokens as collateral for a loan from DAI stablecoin.

The landmark proposal titled “Security Token Refinancing” was submitted to Maker Governance Forums by the International Bank on October 1. It would be the first major collaboration between a traditional bank and a DeFi protocol and could open the door to closer integration between the two. sectors.

Societe Generale (SG) described it as “the first experience at the crossroads between regulated and open source initiatives”.

The bank has offers that it provides “OFH” security tokens (housing finance obligations) which are qualified as covered bonds under French law, and backed by real estate loans.

These would be used to secure a $ 20 million loan in Maker’s DAI stablecoin that would be traded by a number of legal entities and mature in six to nine months.

Based on Ethereum security tokens were issued in May 2020 with a nominal amount of 40 million euros ($ 46.3 million) and a fixed rate of 0%. They mature in May 2025 and have the highest AAA credit rating by rating agencies Moody’s and Fitch.

MakerDAO founder Rune Christensen said he had “no idea” of the proposal, adding that “this is one of many recent examples in Maker Governance of how the organizational model post -foundation turns out to be more scalable “.

Industry Observer “DCInvestor” commented on the potential impact of deals like this on Ethereum and its position as a global settlement layer:

“Societe Generale with their attempt to make their on-chain assets usable in Maker and you wonder if Ethereum will become a global settlement layer, it’s happening now. “

SG said the loan would be a “pilot use case”, with the aim of helping “to shape and promote an experience in the French legal framework”, and “to improve cost-effective service and foster liquidity of clients. digital bonds ”.

SG Forge, a regulated subsidiary of the bank that deals with crypto assets, manages the proposal which is based on the open source CAST (Compliant Architecture for Security Tokens) framework.

The legal framework of the agreement is complex because it must integrate an institutional financial organization into a decentralized network based on governance. An organizational chart provided by the bank details six distinct entities involved in the process. These include the Societe Generale Forge registrar, the bank itself SG, MakerDAO, a legal representative of the DeFi protocol, the DIIS Group security officer and an exchange agent. third.

Source: forum.makerdao.com

Related: Senator Warren’s office confuses MakerDAO for failure of 2016 The DAO project

The pseudonymous MakerDAO community member “PaperImperium” commented on the proposal on the forum:

“Maker and SocGen-Forge are on the brink of financial history. What a time to live. “

The proposal is currently under discussion and will move to a formal vote on governance in the coming weeks.

This is not the first time that Societe Generale has used Ethereum-based security tokens. In April 2019, the SG Forge unit of the bank issued € 100 million bond as OFH security token on Ethereum.



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Newsrust - US Top News: Societe Generale offers historic $ 20 million DAI loan in exchange for bond tokens
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