Europe’s 7th-largest Bank Targets Institutional Users With EURCV
In one of the most significant efforts by a major financial institution to embrace blockchain technology, a subsidiary of Societe Generale, Europe’s 7th largest bank, has launched a euro-pegged digital asset.
SG-Forge, the digital assets-focused subsidiary of Societe Generale, cited institutional clients as the target users of the stablecoin, EUR CoinVertible (EURCV), in a press release. The company cited increased speed and transparency of property transfers, minimized settlement, credit, and counterparty risks, and even the ability to connect with DeFi, as benefits of tokenizing assets.
Cash and liquid securities will back the stablecoin, according to EURCV’s whitepaper.
SG-FORGE’s move to launch a stablecoin shows that despite the ongoing crypto bear market, major institutions still see value in blockchain-based assets. It also comes on a day when the European Union passed its landmark licensing regime, Markets in Crypto Assets (MiCA).
The EURCV whitepaper says it took the upcoming regulations into account when designing the stablecoin. “MiCA regulation will provide legal certainty and clear regulatory framework applicable to stablecoin issuances within the European Union,” it reads.
Next Step For Digital Capital Markets
Further, SG-FORGE thinks that tokenization represents the continuation of a trend which began in the 1980s, when securities shifted from a paper-based format to a digital one. “SG-FORGE perceives digitization of securities and money through DLTs as the next big step towards the building of digital capital markets,” reads the whitepaper.
To be sure, EURCV isn’t likely to be the asset of choice for any cyberpunk looking for a decentralized stablecoin. EURCV will only be available to “any counterparty that is onboarded through Societe Generale Group’s compliance procedures,” the whitepaper says.
The smart contract code for EURCV was also panned on Twitter because Societe Generale will need to issue a transaction of its own to process every transfer of the new stablecoin.
While programmers may criticize the stablecoin’s implementation, Societe General has been one of the most crypto-forward banks. The firm has already chased deals with Maker, DeFi’s leading collateralized lender, launched a compliant security on the Tezos blockchain and assisted in issuing a bond on Ethereum.
EURCV enters a market which has attracted little interest compared to dollar-pegged stablecoins. The combined market capitalization of euro-pegged assets is roughly $188.5M, while the largest dollar-pegged stablecoin, USDT, is over 400 times larger at $81B.