Home News Societe Generale proposes $20M DAI loan in exchange for bond tokens

Societe Generale proposes $20M DAI loan in exchange for bond tokens

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The financial conglomerate Societe Generale offered the MakerDAO DeFi project to use digital bonds issued by the Forge subsidiary as collateral for a loan of $20 million in DAI stablecoin.

Thus, the bank called the proposal “the first experiment at the junction of regulated institutions and open-source protocols”. Societe Generale posted the corresponding application on October 1 at the DeFi project forum. Moreover, the offer implies the use of security tokens OFH (obligations de financement de l’habitat). These are mortgage-backed bonds, according to French law.

The issue of the instruments was in May 2020 at a zero rate. With a nominal volume of 40 million euros ($46.4 million) and maturing in May 2025. Consequently, they have been awarded the highest AAA credit rating by Moody’s and Fitch.

OFH security token

Source: forum.makerdao.com

Furthermore, Forge has released OFH based on Ethereum using the open-source CAST (Compliant Architecture for Security Tokens) framework. A loan for a period of six to nine months will be provided by several legal entities.

For the conglomerate, the deal will become a “pilot use case” for the development of the regulatory framework and “increase the liquidity of digital bonds and the profitability of the service.”

In addition, six organizations will participate in the “Refinancing of security tokens”. Among them are the legal representative of the DeFi project, the securities agent of DIIS Group and also a third-party transfer agent.

The CEO had no idea about the offer

MakerDAO founder &CEO Rune Christensen admitted that he had no idea about the offer. “This is one of the many examples of how the MakerDAO management system can become more scalable,” he said. So, Societe Generale’s proposal will take place in the coming weeks.

Recall that in April, the European Investment Bank planned to place two-year bonds worth 100 million euros on the basis of Ethereum.

At the same time, Societe Generale released the first structured product in the form of security tokens on the Tezos public blockchain.

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