SocGen's blockchain boss has 'natural preference' for public networks

After centuries of advertising a smorgasbord of financing products and advisory services to wholesale customers, investment bankers will soon offer up a menu of blockchains.

That is the vision of Jean-Marc Stenger, chief executive of Société Générale’s enterprise blockchain unit Forge.

“We have, I would say, a natural preference for public blockchains,” said Stenger, in an interview with The Block.

“Because we really think that’s where we will find the maximum interoperability, the ability of multiple players to interconnect with the protocol.”

His comments come roughly a month after Société Générale announced a partnership with Ethereum software firm ConsenSys, which will focus on central bank digital currency (CBDC) issuance and management, among other things. 

Forge has been working closely with Banque de France to experiment with CBDCs. The pair issued a €40 million tokenized bond that was settled using CBDC in May.

Forge hopes the use of security tokens will improve liquidity, shorten settlement times, and cut costs. As The Block reported in May, the tokenized bond was fully subscribed by Société Générale, which simultaneously paid the issuer – the bank’s covered bond vehicle Société Générale’s SFH. Payment was made in digital euros issued by the Banque de France on a blockchain built by the central bank’s “in-house blockchain team.” 

Société Générale has also experimented with issuing securities using Tezos and will be leveraging other networks for “forthcoming issuances,” according to Stenger.

“One of the key hypotheses we took when we started this development is to make sure that we remain a bank. We are not turning ourselves into an IT provider or something like this,” Stenger continued.

“There is still an uncertainty on what will be the blockchain protocol that will basically win the race and impose itself in the future. You have a few protocols that are leading the pack.”

One of those is Ethereum, but there are least “five or six other protocols” in contention, Stenger added.

Forge began as the product of an internal innovation programme at Société Générale roughly three years ago but has recently been transformed into a separate – albeit wholly-owned – subsidiary of the bank.

Like many blockchain initiatives undertaken in wholesale financial markets, one of the biggest challenges facing Stenger and his team is to convince the wider market to embrace a bold new method of transacting.

SDX, the digital assets exchange developed by Six Group in Switzerland, has sought to spur on adoption of the project and of digital assets more generally by bringing in strategic investors.

Stenger, on the other hand, is hopeful that engaging in open source initiatives might do the trick.

“We do think that there is a need to be more open than what we were previously; the way to be more open is not necessarily to open the capital of this subsidiary,” he said.