Société Générale mints $7 million from MakerDAO for stablecoins
Société Générale borrowed $7 million worth of stablecoins from MakerDAO.
The French multinational investment bank and financial services corporation Société Générale borrowed $7 million in dai stablecoins from its issuer MakerDAO.
Last year, MakerDAO’s community members voted unanimously to accept Société Générale’s application to launch a MakerDAO vault. MakerDAO verified to The Block that it had withdrew $7 million in stablecoin for the first time after many months.
Société Générale is able to borrow up to $30 million in dai from Maker, according to statistics compiled by MakerBurn.
The business utilised $40 million in home loan bonds as collateral to borrow from a lending vault on Maker, offering as an example of how established financial institutions may use decentralised finance to generate new borrowing routes.
Dai was established in 2017 as a decentralised stablecoin supported by ether (ETH), the native currency of the Ethereum network. MakerDAO switched to a new mechanism in November 2019, enabling several on-chain crypto collaterals to support dai.
In the last year, MakerDAO has shifted to a policy of diversifying its balance sheet and treasury holdings into real-world assets (RWAs), so diversifying the collateral supporting each dai and decreasing its dependence on crypto assets alone.
MakerDAO authorised and granted a 100 million dai stablecoin loan to Huntingdon Valley Bank in July 2022, using the bank’s loan assets as security. MakerDAO has also invested $500 million progressively in short-term U.S. Treasury bonds and investment-grade corporate bonds.
While the incorporation of real-world assets has widened the scope of dai and diversified its support, it has also put the project to the same regulatory and legal dangers to conventional financial products are faced.