A French bank, Société Générale, is launching a stablecoin pegged to the U.S. dollar after its euro-backed stablecoin failed to gain traction.

The Previous EUR CoinVertible (EURCV) Initiative

Previously, Société Générale introduced EUR CoinVertible (EURCV), which marked a significant milestone as it was the first stablecoin issued by a regulated bank backed by euros. Launched two years ago and compliant with the European Union’s Markets in Crypto-Assets (MiCA) regulations, EURCV currently circulates at around $47 million.

Reasons for Transition to USD

Jean-Marc Stenger, CEO of SG-Forge, Société Générale’s digital assets arm, stated that a U.S. dollar-backed stablecoin was the natural next step for the bank, positioning it as a market leader.

Upcoming USDCV Stablecoin

The new USD CoinVertible (USDCV) is set to launch this summer on Ethereum and Solana blockchains.

Need for Regulation and Robust Offering

Despite the growing stablecoin market, which has reached a value of $250 billion, many players face limitations due to MiCA regulations. For example, Tether, while a major player in this space, is not licensed to operate in the EU. However, Circle, another significant player, is compliant and operates both euro- and dollar-backed stablecoins.

Société Générale believes that USDCV can serve a unique niche as there are no other banking-related players offering such services in Europe. According to Stenger, this offering addresses the strong market need for well-regulated crypto and stablecoin solutions.

Concerns About USD Stablecoins in EU

The Société Générale’s USDCV launch is noteworthy given concerns about increased reliance on foreign currencies within the EU. However, the bank believes that the potential use cases of USDCV—such as crypto trading, cross-border payments, foreign exchange transactions, and cash management—outweigh any risks associated with foreign dependence.

BNY Mellon will serve as the custodian for the stablecoin’s assets, ensuring a robust backing mechanism.