French banking giant Societe Generale has announced its plan to launch a new USD-pegged stablecoin named USD CoinVertible (USDCV) on Ethereum $2,772 and Solana $162 Blockchains. This strategic move positions the bank as potentially the first major European bank to venture into this expanding domain. The USDCV will be rolled out by Societe Generale’s crypto-focused subsidiary, SG-Forge, with custody services provided by New-York based BNY Mellon. This introduction follows the launch of SG-Forge’s euro-pegged stablecoin, EURCV, in April 2023.
Major Bank Enters the Stablecoin Market
The CEO of SG-Forge, Jean-Marc Stenger, emphasized that establishing a dollar-pegged product is a “clear next step” due to the overwhelming dominance of the U.S. dollar in the global stablecoin market. Stenger highlighted that “the stablecoin market is largely transacted in U.S. dollars,” adding that this new asset offers institutional clients, companies, and individual investors the opportunity to benefit from a corporate-level stablecoin.
Both fiat-pegged stablecoins issued by SG-Forge align with Europe’s Markets in Crypto-Assets (MiCA) regulation as authorized Electronic Money Tokens (EMT). MiCA, which came into effect in June 2023, offers a consolidated regulatory framework for cryptocurrencies across the European jurisdiction.
The announcement of USDCV aligns with the rising interest from traditional financial institutions globally. Recently, The Wall Street Journal reported that major U.S. banks are working on a joint stablecoin initiative. Similarly, Stripe’s co-founder, John Collison, mentioned that several banks are “very interested” in stablecoin integration.
Global Regulations and the Growth of Stablecoin Market
According to data from The Block, the stablecoin market broke a record, exceeding $250 billion earlier this month, led by Tether (USDT) and Circle (USDC). This growth underscores the central role stablecoins play in the cryptocurrency market.
There have been advancements in regulations in the U.S. and globally. Despite discussions around former U.S. President Donald Trump’s crypto connections, policymakers in Washington have progressed the GENIUS Act, seen as a significant regulation for the crypto market . Similarly, in South Korea, lawmakers have proposed a stablecoin licensing process in a new crypto law draft.
These regulatory developments pave the way for greater integration of the cryptocurrency market into the mainstream financial system, fostering enhanced institutional involvement. The entry of established financial institutions like Societe Generale into the stablecoin market is viewed as a critical indication of this growing trend.
