A subsidiary of French-based banking group Societe Generale has become the first bank to issue a stablecoin on Ethereum blockchain. The new euro-based stablecoin will be called EUR CoinVertible ($EURCV).
The ERC20 token will be listed on crypto exchange Bitstamp. It is already in the process of opening order books for the EURCV/USDT and EURCV/EUR trading pairs.
Societe Generale’s (GLE) Forge has appointed Flowdesk to be the innovative stablecoin’s market maker. The entity are tasked with providing liquidity in crypto markets and ensuring sufficient liquidity in the order books.
Market makers also act as intermediaries between supply and demand for tokens, allowing traders to liquidate their positions smoothly and at short notice.
Flowdesk will therefore, provide liquidity and active market-making for the EURCV/USDT and EURCV/EUR pairs on Bitstamp and other platforms. It will be one of the few whitelisted parties by SG-FORGE to subscribe and sell-back EURCV. The company’s CEO and co-founder, Guilhem Chaumont, commented on the news saying:
“We are thrilled to partner with SG-FORGE as a designated market maker, a pivotal role in realizing our shared vision of a tokenised financial future. Looking ahead as we approach 2024, we envision a transformative impact where compliant blockchain-based operations by institutions will drastically increase in volume.”
$EURCV is designed to provide a low volatility cryptocurrency by maintaining a stable value equivalent to the Euro. It is backed by cash deposits and cash equivalents denominated in EUR.
The new stablecoin seeks to become a credible alternative to USD stablecoins that dominate the current crypto market. The European region “creates a supportive environment for a strong EU stablecoin to thrive” as it has a stronger reliance on its local currency compared to the US, said Flowdesk in its official announcement.
The banking giant has assured the presence of robust legal structures to ensure the segregation and availability of reserve assets to token holders. EURCV’s ambition is to become a robust settlement and store-of-value asset for on-chain transactions of listed and non-listed security tokens. This also includes on-chain collateral that will be used for the liquidity needs of institutions.
For the initial few days, $EURCV deposits and withdrawals will only be enabled for investors whitelisted by the bank. The ERC20 token also adheres to Societe Generale’s existing compliance procedures including Know Your Customer (KYC) and Anti Money Laundering / Countering Financing of Terrorism (AML-CFT).
Even though it is not the first Euro stablecoin, $EURCV is currently the only one to have the backing of a major regulated European bank which has been reigning financial services in the region for over 150 years.
Other leading stablecoin issuers like Circle and Tether have also launched similar euro-pegged tokens aimed at retail investors. However, they both have thin trading volumes, as per on-chain data.
Earlier this year, American fintech PayPal launched its US dollar-denominated stablecoin on Ethereum blockchain. Called the PayPal USD ($PYUSD), the stablecoin is issued by Paxos Trust Co. and backed by short-term treasuries and similar cash equivalents, along with US dollar deposits.