After its euro-backed stablecoin failed to gain traction, Société Générale is launching a stablecoin pegged to the U.S. dollar.
The Paris-based bank’s EUR CoinVertible (EURCV) was a milestone offering because it marked the first time a regulated bank issued a euro-backed stablecoin.
Though the stablecoin was launched two years ago and is compliant with the European Union’s Markets in Crypto-Assets (MiCA) regulations—which govern crypto and stablecoins—EURCV has only around $47 million in circulation.
Jean-Marc Stenger, CEO of SG-Forge, the digital assets arm of Société Générale, told Reuters that a USD-backed stablecoin was the natural next step for the bank. It is also another landmark for Société Générale, as it will be the first time a major bank has launched a dollar-based stablecoin.
The new coin, dubbed USD CoinVertible (USDCV), is expected to be issued this summer on the Ethereum and Solana blockchains.
The Need for a Regulated Offering
Though stablecoins have become a $250 billion market, MiCA regulations limit many players from trading in the EU. Most notably, Tether—which issues the world’s leading stablecoin—is not licensed to operate in the region.
While the other major stablecoin player, Circle, is licensed under MiCA and has successful euro- and dollar-backed stablecoins in circulation, Société Générale believes there is still room for USDCV.
“At the moment, there are no other banking-related players in that space,” Stenger told Reuters. “That’s definitely the feedback we have from the market, both corporates, financial institutions, but also crypto exchanges. There is a very, very strong need for well-regulated, robust offering in the crypto and stablecoin space.”
A USD Coin in the EU
It had become a foregone conclusion that a significant financial institution would offer a stablecoin, as banks around the world have been inching closer to the digital asset. The Wall Street Journal recently reported that major U.S. banks like Citi, Chase, Bank of America, and Wells Fargo have considered issuing a joint stablecoin.
However, the Société Générale’s USDCV launch is intriguing because there have been concerns in the EU about the dominance of USD stablecoins. Some have said that the reliance on these coins would only increase the region’s dependence on foreign currencies and companies.
Interestingly, USDCV is backed by U.S. bank BNY Mellon, who will act as the custodian for the stablecoin’s assets. However, Société Générale believes that the stablecoin’s potential use cases in crypto trading, cross-border payments, foreign exchange transactions, and cash management outweigh any foreign dependence.
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