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France’s Leading Bank Submits $20M Proposal to DAO

Société Generale Forge, a subsidiary of one of the largest banks in France, Société Generale, has reportedly proposed a $20M loan to MakerDAO for bond tokens. The subsidiary submitted this proposal in exchange for the DAI stablecoin loan. The request was submitted to Maker by the bank Today, October 1.

The historic submission, which was revealed by MakerDAO, makes it the first partnership between a conventional bank and a DeFi protocol. This could eventually open the door for future collaborations between the two parallel sectors. Société Generale called it, “the first experiment at the crossroads between regulated and open source initiatives”. 

The Bank Provides OFH Tokens 

In the proposal submitted to the DAO, the international bank confirmed that it offers Obligations de financement de l’habitat, also known as OFH security tokens. Under French law, these tokens are home-backed loans and are recognized as cover bonds. 

According to reports, these cover bonds would be used as collateral for the $20M DAI loan. The stablecoin would be mediated by a group of legal bodies and mature within nine months. 

The security tokens were issued in May last year with an amount of €40M at a fixed rate of 0%. These tokens will mature in four years and have an AAA rating by Moody and Fitch. 

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MakerDAO Founder Praises the Scalability of the Foundation 

Rune Christensen, the founder of Maker Governance said he had no idea about the submitted application, but praised the scalability of the model employed by the Maker Governance. He added that the recent application sums up how the Maker Governance has grown. 

After seeing the deal, DcInvestor opined that the Bank’s attempt to get their asset usable in the DAO is proof that Ethereum is becoming a global settlement layer. A member of the DAO community commented that the Maker and Société Generale are on the verge of creating history in the financial sector. 

Société Generale disclosed that the loan would help shape and promote an experiment under the Compliant Architecture for Security Tokens, improve service, and grow liquidity for digital bonds. The legal CAST infrastructure is a complicated set of proceedings that integrates a financial institution with a decentralized organization like the Maker. This framework comprises the SG bank, its subsidiary, the DAO, a DeFi protocol legal Rep, amongst other people. 

As of the time of this writing, the proposal is being discussed and will proceed into voting in the coming weeks. The latest move by the international bank with ETH-based tokens adds to the deal it struck in April 2019, when it issued a €100M bond as OFH security token based on ETH. 

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Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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