In a move not taken until now, the blockchain subsidiary of French investment bank Société Générale, Société Générale Forge (SGF), has been granted the inaugural license as a digital asset service provider (DASP) under France's newly established cryptocurrency regulations. While there are various companies that are registered for similar services with the AMF, only those which “provide one or more digital asset services” and are “established in France” are eligible for this optional full licensure.
With the French financial markets regulator, Autorité des Marchés Financiers (AMF), recognizing Société Générale Forge as a DASP, the company is now well positioned to fulfill the rising demand from institutional clients for digital assets. Notably, this is not a trend occurring solely in France – it is also occurring within the United States, as recently echoed by Blackrock CEO Larry Fink who has stated that an increasing amount of gold investors have been inquiring about digital assets.
What it Means
The DASP license, beyond giving Société Générale Forge the authority to act as a custodian for digital assets, provides the bank's blockchain unit with broad permissions. This includes,
- the ability to facilitate transactions involving the buying and selling of digital assets using legal tender;
- trading of digital assets for other such assets;
- and the ability to receive and transmit third-party orders for digital assets
The French DASP system presents a more intricate setup compared to the registration procedure for cryptocurrency companies, which typically only mandates compliance with the nation's anti-money laundering regulations.
In the context of the broader European landscape, the European Union implemented its own Markets in Cryptoassets (MiCA) rules earlier this year. As per these new guidelines, by January 2025, all providers of cryptocurrency services will be obligated to procure a full operating license from a member state to function within the EU bloc.
This strategic move should underscore France's commitment to fostering the development and regulation of digital assets, while also aligning with EU's broader ambitions to manage the growth of the cryptocurrency market.
Although being recognized as an approved, licensed DASP is a big step forward, this development is by no means the first foray by Société Générale into the digital asset sector.
Last year, SGF established partnerships with companies like METACO as it looked to establish and build out its custodial capabilities. At the time, SGF CEO Jean-Marc Stenger stated that “Bridging the digital asset industry and traditional finance requires a multifaceted approach incorporating institutional-grade technology, regulation, as well as industrial capacities. 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.”
Looking back as far as four years, one will see that Société Générale began experimenting with blockchain technology through the tokenization of covered bonds as a security token on the Ethereum network. In 2023, such moves are being undertaken en masse, as tokenization of real-world-assets (RWA) and financial instruments are being seen as an area that may boast massive growth over the coming decade.