Societe Generale-FORGE and Swift Showcase Tokenized Bond Settlements Using Stablecoin

Summary: The digital asset arm of French banking giant Societe Generale, known as Societe Generale-FORGE, in collaboration with Swift, has successfully completed a pilot project. This project demonstrated the exchange and settlement of tokenized bonds utilizing both fiat currencies and stablecoins.

Key Takeaways

Societe Generale-FORGE and Swift completed a pilot for tokenized bond settlement using stablecoins.
EUR CoinVertible, a MiCA-compliant stablecoin, played a central role in the trial.
The project highlights the potential for integrating traditional finance with blockchain technology.
The use of Swift's infrastructure paves the way for faster settlements and enhanced transparency in capital markets.

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Implementation of Tokenized Bonds

Societe Generale-FORGE announced that the pilot effectively showcased the complete process of settling tokenized bonds, covering aspects such as issuance, delivery-versus-payment (DvP), coupon payments, and redemption.

At the heart of this trial was SG-FORGE’s EUR CoinVertible, a stablecoin compliant with the EU’s Markets in Crypto-Assets (MiCA) regulations, designed for on-chain settlement and seamlessly compatible with Swift’s interoperability features.

In September, Societe Generale-FORGE joined forces with Bullish Europe GmbH, a regulated entity under BaFin that specializes in digital asset trading and custody, to introduce the USD CoinVertible (USDCV). By providing both EURCV and USDCV, Societe Generale-FORGE and Bullish Europe position themselves as leaders in the adoption of regulated stablecoins, effectively bridging traditional financial systems with blockchain markets.

Merging Blockchain with Traditional Finance

The recent collaboration builds on extensive efforts between SG-FORGE, Swift, and various financial institutions and public entities to create a secure and interoperable digital asset framework. Swift's role as a coordinating layer was crucial in managing messages and settlements across platforms, ensuring compliance with established financial messaging protocols.

European Initiatives in Digital Finance

This project also draws on prior experimental initiatives by the European Central Bank concerning interbank central bank digital currencies. By incorporating fiat currencies along with stablecoins as settlement assets, the trial explored hybrid models that could be appealing to banks and corporations.

Settlement processes were executed using Swift’s infrastructure along with ISO 20022 standards, which underlines the practicality of adopting tokenized assets within the current regulatory and operational environments.

A Roadmap for Scalable Digital Asset Use

The successful demonstration that tokenized bonds can be settled efficiently using Swift highlights a tangible route for achieving quicker settlement cycles, minimizing operational risks, and enhancing transparency for participants in the capital markets.

Thomas Dugauquier, Tokenised Assets Product Lead at Swift, remarked that the trial illustrates how interoperability will influence the future landscape of capital markets, empowering customers to adopt digital assets confidently and at an extensive scale.

Jean-Marc Stenger, CEO of SG-FORGE, emphasized that this partnership promotes the adoption of rapid, efficient, and secure payment solutions for financial institutions and businesses that utilize distributed ledger technology and EUR CoinVertible as a reference stablecoin.

The pilot, involving participating banks, is part of Swift’s expansive digital asset program. Last September, Swift revealed its collaboration with over 30 global banks, including Societe Generale and SG-FORGE, focusing on a shared digital ledger aimed at facilitating real-time, 24/7 cross-border payments.