Ethereum Green Bonds Stir Tokenization Trend in Europe: AXA & Generali Lead

• Societe Generale Issues First Tokenized Green Bond on Ethereum Network
• Tokenized Bonds Purchased by Traditional Finance Institutions
• Tokenization: A Growing Trend in Traditional Finance
• Benefits of Digital Format for Bonds
• AXA IM's Blockchain Experiment

Societe Generale Issues First Tokenized Green Bond on Ethereum Network

France-based banking powerhouse, Societe Generale, has successfully issued its inaugural tokenized green bond on the Ethereum$2,315 -2.42% network. This move signifies the increasing demand for tokenization of real-world assets (RWA) among conventional financial organizations. Societe Generale issued a total of €10 million ($10.8 million) in digital green bond tokens via SG-FORGE, the bank's digital asset-centric division.

Tokenized Bonds Purchased by Traditional Finance Institutions

The tokenized bonds were bought by traditional finance institutions including AXA Investment Managers (AXA IM) and Generali Investments. Societe Generale plans to use the net returns from the bond sale to fund or refinance sustainable activities. This event highlights the escalating interest of traditional finance (TradFi) institutions in utilizing blockchain-based technologies such as tokenization and stablecoins.

Tokenization: A Growing Trend in Traditional Finance

Just last month, JPMorgan and Apollo grabbed attention by showcasing, in collaboration with several crypto firms, how asset managers could tokenize funds on the blockchain. Tokenization involves transferring assets like bonds, credit, or real estate onto blockchains in the form of a token. 21.co, an investment management firm, has projected that the market value of tokenized assets could skyrocket to $10 trillion as more RWAs shift to blockchain plumbing.

Benefits of Digital Format for Bonds

The digital format of the bonds issued enhances transparency and traceability while also enabling quicker transactions and settlements, as per the bank's information. The bond issuance also signifies an initial move towards using blockchain as a data storage and authentication tool for issuers and investors, aiming to promote global transparency on ESG and impact data.

AXA IM's Blockchain Experiment

AXA IM, the asset management wing of French insurance behemoth AXA, bought €5 million worth of bonds on behalf of AXA France. The purchase was made using the euro-pegged stablecoin EURCV, led by SG-FORGE, as part of a shared blockchain experiment. The objective of this initiative was to test the use of a stablecoin as a settlement asset to procure a digital bond, as informed by Laurence Arnold, AXA IM's head of innovation and strategic initiatives.

Edited by Jonathan Stoker