After failing with its EUR CoinVertible (EURCV), a euro-backed stablecoin that was launched two years ago under MiCA regulations, Société Générale is now introducing a U.S. dollar-pegged USD CoinVertible (USDCV).
Background on EURCV
The Paris-based bank’s EUR CV was significant as it marked the first time a regulated financial institution issued a euro-backed stablecoin, despite launching in compliance with MiCA regulations and having only around $47 million in circulation.
Natural Progression to USDCV
According to Jean-Marc Stenger, CEO of SG-Forge, the digital assets division of Société Générale, a USD-backed stablecoin is now the logical next step. This move underscores that Société Générale aims to be the first major bank in Europe to launch a dollar-based stablecoin.
The USDCV will likely appear this summer on both Ethereum and Solana blockchains.
Regulatory Considerations
The necessity for a compliant offering is highlighted by the limitations faced by other players. For instance, Tether, while popular, operates outside the MiCA regulations in Europe, whereas Circle’s stablecoins are MiCA-compliant but do not yet have a dollar-pegged variant in circulation.
Stenger asserts that there remains a market need for well-regulated and robust offerings, indicating that despite existing alternatives, there is still room for USDCV. He emphasizes, “At the moment, there are no other banking-related players in this space,” adding that both corporates and financial institutions, as well as crypto exchanges, have expressed strong demand.
EU Perspectives on USD Stablecoins
The introduction of USDCV is noteworthy given the EU’s concerns about increased reliance on foreign currencies through stablecoins. However, Société Générale believes the potential benefits in areas such as crypto trading, cross-border payments, foreign exchange transactions, and cash management outweigh these concerns.
BNY Mellon will serve as the custodian for USDCV assets, which might mitigate some concerns about dependency on a U.S.-based entity.