European banking begins to see cryptocurrencies with different eyes. After multiple projects of little scope, it has finally been the large French bank Société Générale, through its subsidiary SG-Forge, who has been encouraged to launch the first stablecoin linked to the euro and based on a public blockchain. In this case, Ethereum.
The first stablecoin from a large European bank. Banks had experimented with cryptocurrencies based on their own blockchains or for internal use, but this is the first 1:1 euro-pegged stablecoin based on a public, high-reaching blockchain protocol such as Ethereum. .
EUR CoinVertible (EURCV) has been announced this week by the digital assets division of the French bank, one of the world’s largest financial institutions, and is expected to be available on multiple exchanges starting in the coming months.
European banking picks up the gauntlet. This week the European Parliament has approved the MiCA Regulation with which they intend to provide legal certainty to the sector. little has taken Société Générale in feeling free to announce its stablecoin, a project that has been audited by PwC and promises to comply with European regulations.
If there is something that needs to be highlighted, it is the courage to launch a project like this. The closest references are JMP Coinan internal JPMorgan stablecoin that worked on its own Onyx network, or the ‘Australia and New Zealand Banking Group’ that does have a Australian dollar-pegged stablecoin.
“Digital assets with stabilization mechanisms (stablecoins) built under a solid bank-grade structure will be a key element to increase confidence in the native cryptographic ecosystem,” he has explained Jean-Marc Stengerdirector of Société Générale Forge.
A daring move, but with a poor technical implementation. One of the advantages of working on a public blockchain is that transactions are easily analyzable. Those interested have not taken long to review the code. The problem is that they have found multiple drawbacks.
As explained by the specialized engineer Alephv, to process and approve each transaction, this must go through the central entity. What derives an additional blockchain transaction that greatly delays an operation that could be almost instantaneous.
If it’s crypto, why is it so centralized? Based on the way this stablecoin is created, and despite the fact that it is based on Ethereum, the bank has the ability to control that money. It is a mechanism that clashes with the very idea of cryptocurrencies, which is precisely the decentralization of financial assets.
Société Générale is an example of what is to come. Some large banks that are interested in digital assets and are convinced by the operational advantages of networks like Ethereum, but that remain focused on taking responsibility for where these coins end up.
Image | Jacques Paquier
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