Societe Generale SG-FORGE to launch USD-pegged stablecoin on Solana and Ethereum

French bank Societe-Generale has launched a US Dollar pegged stablecoin known as USD CoinVertible (USDCV). The bank’s cryptocurrency division SG-FORGE disclosed today’s planned launch, noting that trading will start in July.

According to SG-FORGE, the new stablecoin will be launched on Ethereum and Solana blockchain networks, while the Bank of New York Mellon (BNY) will serve as custodian of its reserves.

With this move, Societe-Generale becomes the first bank to issue a USD-pegged stablecoin, a sector dominated by crypto-native firms such as Tether and Circle. However, USDCV is the second stablecoin from  SG-FORGE since it launched the Euro CoinVertible (EURCV) in 2023.

The bank noted that SG-FORGE will now propose the stablecoins to its customers for currency conversions and enable 24/7 transactions in USD and Euros.

It said:

“USD CoinVertible and EUR CoinVertible are designed to support a wide range of client activities, including crypto trading and cross-border payments, on-chain settlement, foreign exchange transactions, and collateral and cash management.”

Interestingly, the bank stated that its stablecoins would be available on crypto exchanges and to institutional investors. However,  they are not available to US residents.

The unavailability to US residents is interesting, given that the two stablecoins are compliant with the European Union (EU) Market in Crypto Assets (MiCA) standards for Electronic Money Tokens (EMT). SG-FORGE is also licensed as an Electronic Money Institution (EMI).

Despite not offering the USDCV in the US, the bank believes the product would still be seen in a stablecoin market dominated by USD-pegged tokens.

SG-FORGE CEO Marc Stenger said:

 “After the release of a MiCA-compliant EUR stablecoin (EURCV), the launch of a US Dollar version (USDCV) was the obvious next step for Societe Generale–FORGE as market adoption of stablecoins is growing exponentially. The stablecoin market remains largely US Dollar denominated.”

BNY Mellon also highlighted its role in providing infrastructure for the SG-FORGE stablecoins, noting its history and expertise with traditional and digital assets.

SG-FORGE looks to stake claim in a saturated market

Meanwhile, SG-FORGE launching a USD stablecoin means it is entering a sector where many firms have struggled to gain market share. Tether and Circle account for more than 80% of the total $250 billion stablecoin supply with their respective USDT and USDC tokens.

While many other firms have also launched USD-pegged tokens, none have been able to wrestle market share from the two. Even Binance BUSD, which had over $20 billion in supply at its peak, has now faded into irrelevance due to regulatory action.

Given the performance of the SG-FORGE  Euro-pegged stablecoin, it is unlikely that its USDCV will gain much traction in the crowded market. EURVC was launched in 2023 and, according to Defillama, has only around $33 million in market cap with a $29 million circulating supply.

However, the Euro-pegged stablecoin represents a small part of the sector, with   Circle EURC having less than $200 million in circulating supply, even though USDC has more than $60 billion.

Additionally, SG-Force has positioned its USDCV as a MiCA-compliant stablecoin for institutions and retail investors. This could help its adoption in the European market, even though it might still compete with Circle USDC.

More Banks may issue their stablecoins

While Societe-General might be the first bank to issue USD-pegged stablecoins, it is unlikely to be the last. According to reports, major US banks, including JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup, are considering issuing a joint stablecoin.

Wall Street Journal, which published the report, noted that discussions are still in the early stages with the potential partners waiting for the outcome of the legislative efforts to regulate stablecoins. The GENIUS Act, which will regulate stablecoin, is set to face a vote in the Senate on June 11.

Although the proposed legislation has over 100 amendments being debated, the Bill is expected to pass. Circle CRCL’s massive rally as it went public is evidence of positive sentiments around the stablecoin sector as the market awaits regulatory clarity.

Interestingly, other financial institutions are also working on stablecoins. These include Deutsche Bank, Japanese banking giant SMBC, and asset manager Fidelity.

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