Société Générale, a French multinational investment bank and financial services company, minted $7 million as a loan of dai stablecoin from its issuer MakerDAO.
Société Générale was approved to start a MakerDAO vault last year after a unanimous vote from MakerDAO's community members. After several months, for the first time it has withdrawn $7 million in stablecoin, MakerDAO confirmed to The Block.
The specific vault has a debt ceiling of $30 million, which means that Société Générale can borrow up to this amount of dai from Maker, according to official data aggregated by MakerBurn.
The firm used home loan bonds worth $40 million as collateral to borrow from a lending vault on Maker — serving as an example of how traditional finance players can leverage decentralized finance to create new avenues for borrowing.
Dai was founded in 2017 as a decentralized stablecoin backed with ether (ETH), the native token of the Ethereum blockchain. In November 2019, MakerDAO migrated to a new system, allowing multiple on-chain crypto collaterals to back dai.
In the last year, MakerDAO has pivoted to a strategy of diversifying its balance sheet and treasury holdings into real-world assets (RWAs), thus varying the collateral backing each dai and reducing reliance on crypto assets alone.
In July 2022, MakerDAO approved and issued a 100 million dai stablecoin loan to U.S.-based Huntingdon Valley Bank, using its loan assets as collateral. MakerDAO has also been gradually investing $500 million into short-term U.S. Treasury bonds and investment-grade corporate bonds.
While the use of real world assets has broadened the scope of dai and diversified its backing, it has also subjected the project to the same regulatory and legal risks to which traditional financial products are exposed.
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