Third Largest Bank of France Submits a Proposal on MakerDao for $20 Million Security Tokens Refinancing
Société Générale, the third-largest bank in France with 29 million clients, is directly interacting with decentralized finance through the original DeFi protocol MakerDAO.
This week, the bank submitted a proposal for “[Security Tokens Refinancing] MIP6 Application for OFH Tokens” on the MakerDao forum.
The European investment firm’s blockchain subsidiary made a collateral onboarding application to Maker for $20 million backed by EUR bonds. The proposal reads,
“This first experiment at the crossroads between regulated and open source initiatives is intended to refinance a Covered Bond Token that has been issued last year on the Ethereum public blockchain.”
The bank’s OFH Tokens issued by Societe Generale SFH are covered bonds benefiting from a statutory privilege, which can only be traded over-the-counter (OTC).
Through this pilot use case, SG-Forge aims to refinance the OFH Tokens held by the banking giant and integrate with one of the largest DeFi protocols, MakerDAO.
As per the proposal, this transaction will allow the peer-to-contract lending platform that enables over-collateralized loans to have a different types of collateral assets from the cryptocurrencies. These will be non-volatile types of collateral assets, it added.
The DAI loan will be for up to $20 million for a maturity period of 6 to 9 months. DAI is a fully collateralized stablecoin native to Maker's decentralized autonomous organization (DAO).
“The DAIs have been characterized as digital assets as defined under French Law,” notes the proposal.
“Turns out it was the future of France all along!” said Rune Christensen, founder of MakerDAO.
“Amazed that I had no clue about this at all the whole time. This is one of multiple recent examples in Maker Governance of how the post-foundation model of organization is proving to be more scalable.”