Today Societe Generale Forge (SocGen Forge) unveiled the EURCV stablecoin (EUR CoinVertible), which is initially being issued on the Ethereum public blockchain with plans for other blockchains as well. This is the first public blockchain stablecoin issued by a subsidiary of a global systemically important bank (G-SIB).
SocGen Forge has been at the cutting edge of blockchain for some time, providing the infrastructure for the first blockchain bond issued by the European Investment Bank (EIB) on Ethereum. Like that bond, the stablecoin uses Forge’s CAST framework for tokenization. It was also the first major commercial bank to launch a public blockchain bond back in 2019.
The motivation for the issuance includes using it as a robust settlement asset for on-chain transactions. The DLT Pilot Regime is now in force, although no major projects have yet been unveiled. Other client needs that SocGen Forge is targeting include corporate treasury, on-chain liquidity funding and an asset for margin calls.
In terms of jurisdiction, it is a French regulated digital asset and the company received its digital asset license last year. On the one hand, it has many of the features you’d expect from a conservative regulated institution. Access to the stablecoin is restricted to investors that have been through SocGen KYC and AML procedures. And the backing assets are fully segregated. If SocGen doesn’t want to buy the stablecoins from the holders, they can be redeemed or converted into collateral.
However, the collateral is of a lesser quality than the reserves of the USDC or Paxos dollar stablecoins. Collateral supporting the EURCV is cash at a bank with at least the credit rating of SocGen and short term securities with an unsecured credit rating equivalent to SocGen or better. In contrast, USDC and Paxos only invest in bank deposits and Treasuries or Treasury repo.
SocGen Forge plans to have the stablecoin listed on digital asset exchanges.
“Digital assets with stabilisation mechanisms – i.e. stablecoins – built under a robust banking-grade structure will be a key element to increase trust and confidence in the native crypto ecosystem,” said Jean-Marc Stenger, CEO of SG-FORGE. “This issuance is a major step in Societe Generale–FORGE’s roadmap to deliver innovative solutions to its clients, either real-money institutions and corporates or entities of the crypto industry, and to facilitate the emergence of new market infrastructures based on blockchain technology.”
White & Case was the legal advisor, Equitis Gestion is the fiduciary, and PwC audited the smart contract.
Earlier this month, Brazilian investment bank BTG Pactual launched a dollar stablecoin.