This week, Societe Generale Forge announced the teams selected for its second CAST Challenge Hackathon. The event will explore blockchain and tokenization with Union Investment as a surprise participant. It is one of the leading German asset managers with €424 billion in assets under management.

The big French asset manager AXA Investment Managers (AUM 842 billion euros) is also involved, but as a judge along with ABN AMRO, AXA Investment Managers, Banco Santander, Credit Agricole CIB and VISA. We’ll come back to the asset management angle.

The two tasks of the hackathon are to explore on-chain settlement as delivery versus payment and to develop smart contracts using standards developed by ISDA, ISLA, ICMA and ANNA.

Aside from Union Investment, the other teams are all startups. We previously wrote about Obligate (formerly FQX), the Swiss firm that helps companies issue bonds and commercial paper on the blockchain. Its backers include the Swiss stock exchange SIX and stablecoin issuer Circle.

The other hackathon participants are Cadmos, Ceres Advisory, FeverTokens, Kaiko, Quantoz and We fundia.

The CAST name is based on the CAST Framework developed by Societe Generale Forge for tokenization.

Asset managers embrace tokenization

Perhaps it shouldn’t come as a surprise that Union is a participant. He is one of the most prolific investors in digital bond issues. Bought the entire €100 million issue of the first European Investment Bank (EIB) digital bond to use SocGen Forge’s blockchain platform.

Both asset managers invested in the EIB’s second digital bond. Union also invested in Siemens’ digital bond. And there is a pattern among asset managers broadening their interest in blockchain.

Schroders invested in the EIB’s third bond and is now participating in trials in Singapore with fund distribution platform Calastone to use public blockchain for fund tokenization.

For asset managers, there is a wide range of tokenization options. They can invest in unique digital securities. They can issue tokenized funds. But Calastone believes that the real benefits come when all assets within the fund are tokenized, allowing many of the fund’s management processes to be automated, as well as new opportunities such as customization.