Following its euro-backed stablecoin EUR CoinVertible (EURCV) which failed to gain significant traction, Société Générale is now launching a new stablecoin pegged to the U.S. dollar.

The EUR CoinVertible (EURCV)

The Paris-based bank’s EUR CV was an important milestone, marking its first regulated issuance of a euro-backed stablecoin in compliance with the European Union’s Markets in Crypto-Assets (MiCA) regulations—rules that govern crypto and stablecoins.

Although launched two years ago, EURCV has only approximately $47 million in circulation. This indicates limited market appeal or usage despite regulatory approval.

The Natural Next Step: USD CoinVertible (USDCV)

Jean-Marc Stenger, CEO of SG-Forge—Société Générale’s digital assets arm—told Reuters that a U.S. dollar-backed stablecoin is the logical next move for the bank. USDCV will be Société Générale’s first major launch of a dollar-based stablecoin.

Expected to be issued this summer on both Ethereum and Solana blockchains, USDCV aims to address regulatory and market needs within Europe.

The Need for a Regulated Offering

Despite the growing $250 billion stablecoin market, MiCA regulations limit many non-compliant players from trading in the EU. Notably, Tether, despite being widely used, is not licensed to operate in this region. On the other hand, Circle, while compliant with MiCA, already offers successful euro- and dollar-backed stablecoins.

Société Générale sees potential for USDCV due to its well-regulated stance, robust offering, and potential use cases that include crypto trading, cross-border payments, foreign exchange transactions, and cash management. These applications are seen as outweighing concerns about increased foreign currency dependency in the EU.

USDCV: A USD Coin in the EU

The launch of USDCV by a major bank like Société Générale is notable given ongoing discussions among U.S. banks regarding their own stablecoin initiatives, as reported by The Wall Street Journal.

However, there are concerns about the dominance of U.S.-backed stablecoins in Europe. Some argue that reliance on these coins could exacerbate regional dependence on foreign currencies and companies.

Despite this, USDCV is backed by BNY Mellon, which will serve as custodian for its assets. The bank believes that USDCV’s strategic benefits outweigh such concerns, particularly in light of its intended uses and the strong demand from corporations, financial institutions, and crypto exchanges.