Societe Generale (SocGen) has completed the first repo transaction on public blockchain with Banque de France, the central bank and member of the Eurosystem for France.

The transaction was a collateralised market transaction executed entirely on blockchain through its subsidiary Societe Generale Forge.

Focused on digital assets and blockchain technology, Forge provides services for issuing and managing financial products on the blockchain, including digital asset insurance, stablecoins, blockchain integration and digital financial services.

The bank says that the trade represents the first in digital securities with a Eurosystem central bank.

SocGen deposited as collateral with the Banque de France some bonds issued in 2020 on the public blockchain Ethereum in exchange for Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain.

The bank said that the transaction demonstrates the technical feasibility of interbank refinancing transactions directly on blockchain.

According to SocGen, the repo transaction illustrates the potential for a CBDC to improve the liquidity of digital financial securities.

“This pioneering transaction demonstrates Societe Generale's commitment to leverage its expertise in financial structuring and the technological capabilities of SG-FORGE to help build innovative financial markets,” Societe Generale said in a statement.

Repo transactions have recorded a steady increase in the past year, with data from the Office of Financial Research (OFR) revealing that the US repo market in particular has seen consistent activity.

Repo transactions on public blockchain are not widespread though. JP Morgan in 2020 executed a repo transaction using its blockchain platform Onyx.

Last month, JP Morgan announced the rebranding of its blockchain arm from Onyx to Kinexys, with the move coming as the bank looks to expand the platform’s capabilities, including introducing foreign exchange services.

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