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Société Générale – Forge (SG – Forge), a digital financial products service provider, has selected technology and infrastructure company, Metaco, to orchestrate its digital asset custody operations.
The partnership enables SG – Forge, a subsidiary of SocGen, to use Metaco’s digital asset custody and orchestration platform, Harmonize, to facilitate the integration of security tokens into traditional finance and expand its offerings at scale.
“Bridging the digital asset industry and traditional finance requires a multifaceted approach incorporating institutional-grade technology, regulation, as well as industrial capacities,” said Jean-Marc Stenger, CEO of Société Générale – Forge.
“By partnering with Metaco, SG – Forge will be able to leverage their secure infrastructure to ensure that we have a solid foundation to grow our digital asset market activities.”
SG – Forge provides digital-native security tokens registered on public blockchains. It offers a range of tokenised capital market products to institutional clients for issuances and investments under security token formats on Ethereum and Tezos with full banking level safety and regulatory compliance.
Metaco is a Swiss technology company that provides financial institutions with a platform to issue, store, and manage cryptocurrencies and digital assets.
The partnership with Metaco comes a day after New York-listed fintech Broadridge Financial Solutions announced that SocGen had gone live on the company’s distributed ledger technology repo platform.
SG – Forge’s both collaborations follow the EU’s finalisation of the legislation of the pilot regime for tokenised securities, due to come into effect on 23 March 2023.
The new legislation will give certain retail investors access to blockchain technology-based securities while permitting the processing of security tokens through market infrastructures in compatibility with applicable EU regulations.
Banks step up digital-asset custody efforts
SocGen is the second major investment bank to partner with Metaco in the last 30 days.
Only last week, Citi chose Metaco to develop and pilot the bank’s digital asset custody capabilities.
SocGen and Citi’s focus on digital asset custody services underscores the wider trend of financial institutions looking to leverage the potential of DLT and tokenised securities.
According to the World Economic Forum, up to 10% of global GDP will be stored and transacted via DLT by 2027, while tokenised markets could potentially be worth as much as $24 trillion by then.
With digital asset-friendly regulations on the horizon and an increased understanding of the DLT’s potential, financial institutions have been taking a series of actions.
Moreover, the increase in financial crimes has also pushed for firms to provide their clients with stronger safeguards against theft.
Blockchain data platform, Chainanalysis in its Crypto Crime Report 2022, stated that in 2021, scamming revenue rose 82% to $7.8 billion worth of cryptocurrency stolen from victims.
To protect their digital assets-exposed clients, banks have been evolving to preserve their digital securities.
In April, Commerzbank was reported to have applied for a digital asset custody license to transact with cryptocurrency and tokenised securities.
Two months earlier, BNY Mellon was reported to have been readying the launch of a multi-asset digital custody platform, built in cooperation with fintech Fireblocks.
Initially, the platform will be launched in the US before being available in the UK.
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