SocGen Becomes First Major Bank To Back Euro Stablecoin
Société Générale SCGLY is launching a stablecoin. The French bank will be the first major financial institution to offer digital assets tracking the price of fiat currencies to investors. Société Générale said that EUR CoinVertible would be fully backed by euros.
“The crypto ecosystem is highly concentrated on a few existing stablecoins, 90% denominated in US dollars . . . we definitely think that there is a place for a bank in this field and there is a place for a euro [denominated] stablecoin,” chief executive of SocGen Forge, the bank’s digital assets unit, Jean-Marc Stenger commented as Financial Times reported.
The stablecoin market worth $128.8 billion, as of Dec.6, 2023 (based on CoinMarketCap data), has major players like Tether and Circle.
Why It Matters: Contrasting the JPMCoin from JPMorgan Chase, which is available only to a group of institutional clients, SocGen’s stablecoin will be widely available for trading with its listing and will also be aligned with the European Union’s flagship regulation, MiCA rules. MiCA will come into effect in 2024.
Stenger sees the stablecoin as being used for settling trades in digital bonds, funds, and other assets amid traditional financial institutions exploring digital ledgers.
Stenger also adds that token holders will have no exposure risk to the bank itself and will have a direct correlation to the collateral asset of the stablecoin. The euros will be held in a trust managed by a third party.