Societe Generale-Forge (SG-Forge), a regulated subsidiary of Societe Generale Group, has announced the launch of a stablecoin called EURCV, which is pegged to the euro and issued on the Ethereum blockchain. SG-Forge’s CEO, Jean-Marc Stenger, highlighted that the development of “digital assets with stabilisation mechanisms built under a robust banking-grade structure” would be instrumental in increasing trust and confidence in the crypto ecosystem. However, the launch has faced criticism over smart contract issues and the decision to issue an ERC20 token.
SG-Forge’s euro stablecoin aims to be an institutional-grade, fiat-pegged token that adheres to banking, legal, and regulatory requirements. The efforts to enhance security and transparency in the realm of digital assets, specifically for institutional investors, align with Societe Generale Group’s overall strategy. According to the company’s announcement, the issuance of a stablecoin on an Ethereum blockchain is a significant step forward in its roadmap to deliver innovative solutions to its clients and facilitate the emergence of new market infrastructures based on blockchain technology.
SG-Forge’s EURCV token has a maximum total supply of 10,000,000 as of today, with only one holder, suggesting that SG-Forge has not yet distributed the stablecoin. The contract hosted on etherscan shows that the coin is an “official institutional euro stablecoin issued by Societe Generale-Forge.” However, concerns have been raised about smart contract issues that have made it risky, including the fact that the contract owner has the authority to modify the balance of tokens at other addresses, which may result in a loss of assets.
Additionally, the contract contains a “whitelist function,” which means “some addresses may not be able to trade normally,” according to Gopluslabs’ contract analyzer. These issues have led to criticism from the blockchain community about SG-Forge’s decision to issue an ERC20 token, with some experts questioning its use case.
Software engineer Cygaar questioned why the bank decided to issue an ERC20 in the first place, stating that “they’d be much better off using Onyx (JPM’s internal system) or some internal [database] since they’re looking for a centralized settlement layer. An ERC20 token does not fit their use case.”
Despite the criticism, the launch of EURCV represents a significant development in the cryptocurrency industry, which already has a few euro-backed stablecoins issued by Circle Financial and Tether. The move by a traditional financial institution to issue an institutional-grade stablecoin could pave the way for wider adoption and integration of digital assets in the existing financial system. However, it is essential for regulatory authorities to ensure that the stablecoin adheres to the necessary compliance requirements and safeguards against risks associated with smart contracts.
In conclusion, the launch of EURCV by SG-Forge represents a significant milestone in the development of stablecoins issued by traditional financial institutions. However, it is crucial to address the smart contract issues and clarify the use case of an ERC20 token to enhance trust and confidence in the native cryptocurrency ecosystem. The successful integration of stablecoins into the existing financial system could potentially open up new opportunities for businesses and create a more inclusive and accessible financial system for everyone.
