Société Générale Launches Euro Stablecoin on Bitstamp
French banking giant Société Générale is introducing a euro-pegged stablecoin called EUR CoinVertible on the Bitstamp exchange. This move allows the bank’s clients to participate in the digital asset market without the limitations of private networks like JPM Coin offered by JPMorgan. It is a significant milestone as it marks the first time a traditional bank is entering an industry primarily dominated by niche companies.
CEO Believes in the Potential of a Euro Stablecoin
Société Générale CEO Jean-Marc Stenger believes that there is a place for a euro-denominated stablecoin in a market where US dollar-backed equivalents dominate. The stablecoin, EUR CoinVertible, will be utilized for settling trades in digital bonds, funds, and other assets. To address liquidity concerns, Stenger assures customers that the stablecoin will have asset backing handled by a third party. Additionally, it will comply with the European Union’s Markets in Crypto-Assets (MiCA) bill, which takes effect next year.
Testing European Appetite for Stablecoins
The launch of EUR CoinVertible aims to gauge European interest in stablecoins. Negative interest rates have hindered Euro-denominated stablecoins due to their impact on yields offered by crypto platforms to depositors. Currently, EURC holds the largest market share compared to rivals EURT and EURS.
Potential for Stablecoin Improvements in Traditional Banking
While regulatory clarity for stablecoins remains uncertain in the US, MiCA provides clear guidelines for stablecoins in Europe. Once enacted, MiCA may alleviate liquidity concerns similar to what affected the issuer of USDC stablecoin earlier this year. This could position Europe as a viable testing ground for the improvements stablecoins can bring to traditional banking.
Tokenized Bank Currency Has Limited Popularity
Tokenized fiat bank settlements have only benefited select parties thus far. JPMorgan recently launched a euro-denominated version of its JPM Coin, but the volumes remain small compared to the bank’s overall daily transactions. The European Central Bank faced opposition to its proposal for a digital euro due to surveillance concerns but is actively working on building a conceptual foundation for a central bank digital currency.
Hot Take: Société Générale Dives Into Euro Stablecoin Market
Société Générale’s introduction of EUR CoinVertible on Bitstamp marks a significant step for traditional banks entering the digital asset market. By offering a euro-pegged stablecoin, the bank aims to cater to clients who want to explore this industry without the limitations of private networks. This move could test European interest in stablecoins and potentially position Europe as a hub for stablecoin innovation in traditional banking. With regulatory clarity provided by MiCA, liquidity concerns may be addressed, leading to increased adoption and utilization of stablecoins in Europe.
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