Apr 21, 2023

Institutional Stablecoin Launched by French Bank, Criticized by Crypto Community

Societe Generale-Forge (SGF), a French bank, has recently released their Ethereum-based stablecoin called EUR CoinVertible (EURCV). The announcement of the new stablecoin was met with criticism from the crypto community due to its decision to restrict peer-to-peer transactions.

The stablecoin is only available to qualified institutional clients, and its code requires that ERC-20 transfers must first be approved by a centralized registrar — presumably one controlled by the bank — before the transaction is processed. This decision was met with disapproval from smart contract engineer “alephv.eth”, who tweeted that the code was a “radical commitment to inefficiency in the name of regulation”.

Nonfungible token (NFT) project founder “foobar” tweeted to his followers that the code was “the worst code I’ve ever seen” and described the stablecoin as a “laughing stock”. Crypto researcher Mason Versluis also tweeted that the code was “absolutely horrible” and suggested the French bank to “stop trying to weasel” into crypto.

Ether (ETH) investor Ryan Berckman provided a more neutral analysis, stating that many traditional financial firms like SGF will take “baby steps” as they move into blockchain and digital assets. He explained that SGF may also be incorrect in its claim to be the first bank to launch an institutional stablecoin on a public blockchain, as the National Australia Bank (NAB) had minted an AUDN stablecoin on Ethereum in March. Berckman expects more banks to follow suit in the months to come.

SGF’s stablecoin isn’t intended for public use — at least to begin with. It is designed to bridge the gap between assets in traditional capital markets and the digital assets ecosystem, and a total of 10 million EURCV tokens were minted on Ethereum three days ago according to Ethereum explorer Etherscan. All 10 million tokens are held by one wallet address.

The launch of the stablecoin is backed by the growing demand for a new settlement asset to process on-chain transactions. With the launch of EURCV, the financial world is slowly transitioning to a more digital-based landscape. As more banks and institutions move towards the web3 space, the use of NFTs and other digital assets will become more commonplace.

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