The crypto division "FORGE" of the French banking group Société Générale has launched its own euro stablecoin based on the public Ethereum blockchain. The Euro CoinVertible (EURCV) aims to bridge the gap between traditional markets and the digital assets ecosystem.
Interest in blockchain technology, particularly in the tokenization sector, is growing among European banking giants. As a pioneering project of Société Générale, the in-house euro stablecoin is supposed to provide institutional clients with access to innovative settlement and liquidity management solutions. The offering is part of the bank's growing crypto strategy, aimed at providing investors with services fully compliant with banking regulations and standards.
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Legacy functions in new innovation project
CoinVertible enables institutions to tokenize their assets on the Ethereum blockchain. The Société Générale group's euro stablecoin is then used to settle transactions between parties. The value of the stablecoin is pegged to the euro, with the collateral held in a segregated portfolio. As can be seen on the Ethereum block explorer Etherscan, 10 million euros in EURCV have been created so far. The crypto division of the bank describes the central features of the project as follows:
- provides a robust settlement instrument for on-chain transactions
- is an innovative solution for treasury, cash management, and cash pooling activities of corporations
- enables liquidity sourcing and refinancing solutions on the blockchain
- provides a solution for intraday liquidity needs (e.g., margin calls)
- secure legal structure ensures that the collateralization of the stablecoins is fully separate from the issuer, that token holders have direct access, and that mechanisms for business continuity in case of market or technological events are in place
- access to the euro stablecoin is restricted to customers of the Société Générale group who have completed the compliance procedures (KYC/AML-CFT, etc.)
Société Générale identifies crypto sector as growth market
Since the creation of its subsidiary FORGE in 2018, the French banking giant has been exploring the benefits of blockchain technology. In 2020, Société Générale's digital asset division issued covered AAA bonds settled using a digital CBDC euro from the Banque de France. A year later, FORGE was part of a 100 million euro pilot project by the European Investment Bank that also tested bonds on the Ethereum blockchain. In January of this year, SG-FORGE experimented with an external DeFi project (MakerDAO) for the first time.
To expose its product to the largest number of qualified institutional investors, Société Générale will start collaborating with reputable crypto exchanges and trusted third-party platforms to list the euro stablecoin in the coming months. The legal structure of the stablecoin issuance is ensured by the French justice system, with the bank expecting potential changes with the future introduction of the MiCA framework.
"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. 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." - Jean-Marc Stenger, CEO of Société Générale-FORGE