The French Central Bank and Societe Generale complete a blockchain-based repo transaction

In what it described as the first tokenised transaction of this kind with a central bank in the euro zone, Societe Generale said that it executed a blockchain-based repurchase agreement with the Banque de France.

The lender's subsidiary, SG-Forge, which focuses on digital assets, exchanged CBDC issued by the Banque de France on its DL3S blockchain for bonds issued in 2020 on the public Ethereum blockchain, according to a press statement.

Because the issuers of stablecoins are already subject to the Markets in Crypto Assets (MiCA) regulation framework by the European Union, SG-Forge has carefully monitored any deployment strategies of their euro stablecoin, EUR CoinVertible (EURCV). The repo transaction was not for the token.

Meanwhile, the Banque de France has been actively studying whether wholesale CBDCs might improve things like settlement finality and cross-border payments. More broadly, one of the more attractive applications of the technology for banks has been blockchain-based repo transactions.

This transaction demonstrates the technological viability of interbank refinance operations conducted directly on blockchain. According to a press release from SocGen, this demonstrates how a central bank digital currency could increase the liquidity of digital financial products.

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