This late September (September 30, 2021) history has been made with Société Générale’s proposal, called “Security Tokens Refinancing”, to the leading DeFi platform MakerDAO for a stablecoin DAI loan in exchange for bond tokens as collateral.
The party managing the collateral application, called SG-Forge, is a regulated subsidiary of Société Générale (SG) focused on digital assets and licensed as an investment firm under MiFID II Regulation.
The pledged tokens – OFH tokens, are characterized as covered bonds (security tokens) and shall collateralize a $ 20 million loan in Maker’s DAI stablecoin that would be mediated by a number of legal entities. Some of the main objectives listed in the application by SG-Forge are integration with one of the largest DeFi protocols and to “help to shape and promote an experiment under the French legal framework”.
“This experimentation combines traditional capital market activities with the decentralized finance (“DeFi”) emerging and growing ecosystem,” further says SG.
The legal architecture and business development of the upcoming deal are complex and surely of great interest worldwide. The potential impact of this deal goes beyond its imminent participants as it presents enticing new opportunities. Undoubtedly, this is a turning point in financial history and shall be followed closely.
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