European banking giant Société Générale has successfully completed a market transaction using tokenized bonds. These bonds were issued back in 2020 and are based on the Ethereum (ETH) blockchain.

So, what are tokenized bonds? They are digital versions of traditional bonds. This means you can hold and trade them on a blockchain. The great thing about blockchains is that they provide a secure record of ownership and transaction history. No tampering allowed!

In a recent statement, Société Générale announced that it carried out this transaction through its subsidiary FORGE. The bonds were used as collateral in exchange for a central bank digital currency (CBDC) from France’s central bank, Banque de France, which operates on its DL3S blockchain.

This marks the first time a repurchase agreement (repo) has been executed on a blockchain with a member of the Eurosystem. A repo is a short-term deal where securities are sold and then repurchased later at a higher price.

As Société Générale put it, “This is the first repo transaction in digital securities with a Eurosystem’s central bank.”

The bank also pointed out that this transaction shows how feasible it is to conduct interbank refinancing operations directly on the blockchain. It demonstrates the potential of a Central Bank Digital Currency to improve liquidity in digital financial securities.

In short, this is a significant step forward in the world of digital finance.