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Future of Finance via Société Générale & MakerDAO

French investment MNC Société Générale’s subsidiary Société Générale-Forge (SG-Forge) has pitched a proposal to leverage the DeFi protocol MakerDAO. SG-F has published its “Security Tokens Refinancing” MIP6 application for OFH tokens on MakerDAO’s forums—1st October (2021). SG-Forge intends to use the DAI stablecoin for refinancing the “covered bond token.”

MakerDAO’s founder Rune Christensen tweeted the following:

Société Générale, the third largest bank in France, just made a collateral onboarding application to Maker for 20 million USD. 

Backed by EUR bonds, proposed by their blockchain subsidiary. https://t.co/hxGEMOIWjy

Rune Christensen (@RuneKek) September 30, 2021

The said SG-Forge proposal pitches developing “OFH tokens” (home loans-backed covered bonds). The bonds in question that back the OFH tokens are “aaa” rated by Moody’s and Fitch’s rating is “AAA.” These bonds exhibit a higher creditworthiness, with a higher investor repayment capacity. Development of these OFH tokens will be per the Compliant Architecture for Security Tokens (CAST).

Société Générale’s proposal summary states:

“The “OFH Tokens”: the OFH Tokens are characterized as covered bonds under French Law backed by home loans and benefiting from a statutory privilege, issued by Société Générale SFH (SG SFH) a specialized credit institution with the status of Société de Financement de l’Habitat delivered by the Autorité de Contrôle Prudentiel (as further described below) in the form of security tokens in the Ethereum public blockchain.”

French Legalities for Société Générale

Per French law, the liable legal framework requires complying with the stated stipulations in the real world. So, “enforcing the terms of the loan on the real-world side on Maker’s behalf” is a must, CoinDesk reports. For acing the compliance game, forming the following entities is mentioned in the said proposal:

  1. SocGen
  2. SocGen Forge
  3. The MakerDAO protocol
  4. The DIIS Group (the “security agent”)
  5. A to be appointed MakerDAO legal representative
  6. A to be named third-party to facilitate DAI loan to dollars exchanging (a custodian service or a centralized exchange).

About MakerDAO

“An unbiased global financial system,” MakerDAO is an enabler of the Dai stablecoin generation. As Dai builders, MakerDAO supports Dai—the world’s first unbiased decentralized stablecoin currency. DeFi platform MakerDAO allows borrowers to utilize volatile cryptocurrency as loan collateral for the U.S. dollar-pegged stablecoins.

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