EUR CoinVertible (EURCV): A Euro-based Stablecoin

EUR CoinVertible (EURCV): A Euro-based Stablecoin from Societe Generale-FORGE
Decentralized finance (DeFi) has been developed to enable users to conduct financial transactions in a decentralized and transparent environment via blockchains and smart contracts. Soon after DeFi’s inception, users realized that tokens with values linked to traditional currencies and assets would make DeFi even more useful. These assets, known as stablecoins, gained particularly strong adoption as the DeFi movement began in 2020.
Typically, stablecoins are pegged to fiat currencies, with most stablecoins pegged to the US dollar. This includes popular tokens such as USDT, USDC, and Dai. Euro-pegged stablecoins came to market somewhat later. In April 2023, Societe Generale-FORGE, a subsidiary of Societe Generale focused on crypto-assets, launched a new stablecoin pegged to the euro (EUR): EUR CoinVertible (EURCV).
What is EUR CoinVertible (EURCV)?
EUR CoinVertible is a digital asset that promises to maintain a stable value relative to a reference asset, unlike other crypto assets that are not linked to another asset. The value is currently backed by fiat euros held in a bank account at Societe Generale and is designed in accordance with the French legal framework for digital assets. EUR CoinVertible is intended to provide:
• Settlement and value-stable asset for on-chain transactions,
• A solution for cash management and cash pooling activities,
• On-chain liquidity financing and refinancing solutions,
• A solution for intra-day liquidity needs (e.g., margin calls).
How was EUR CoinVertible developed?
EUR CoinVertible was created by a subsidiary of Societe Generale (SG) called Societe Generale-FORGE (SG-FORGE). SG is one of the largest banking and financial service providers in France, founded in 1864. SG-FORGE is the subsidiary of SG dedicated to crypto assets and provides services such as issuing and managing on-chain assets and financial products for clients, including investors, businesses, and other financial institutions. In addition to EURCV, SG-FORGE has offered digital bond and structured product services since 2019, which were originally issued on Ethereum and Tezos.
SG-FORGE announced its EURCV stablecoin in April 2023 to “bridge the gap between traditional capital markets and the digital asset ecosystem,” and in October 2023, SG-FORGE announced an updated EURCV smart contract to “improve resilience” and make transfers faster, particularly by enabling fee-free transfers between approved investors.
How does EUR CoinVertible work?
EURCV is a token issued on the Ethereum blockchain network. As a fiat-backed stablecoin, SG-FORGE ensures that all EURCV tokens are backed by bank deposits or high-quality securities on a 1:1 basis. The collateral assets are separated from the overall assets of SG-FORGE on an accounting and legal basis with a known fiduciary and are exclusively assigned to cover the value of the EURCV stablecoin. The level of collateralization is updated daily and published on the SG-FORGE website.
When SG-FORGE issues and sells EURCV to clients, the funds that clients use to purchase the tokens are transferred to a third-party financial institution that holds the funds in an account solely meant to cover the value of EURCV. This structure ensures that users have full access to the value of their tokens, even if there are issues with the EURCV token on the blockchain.
Integral to the design of EURCV are the know your customer (KYC) and anti-money laundering (AML) controls. Anyone wishing to acquire EURCV from SG-FORGE must be onboarded by the company to exchange their assets for EURCV tokens, and through this process, their Ethereum addresses are approved by the company. Additionally, transfers of EURCV can only occur between Ethereum addresses that have been approved by SG-FORGE. Some argue that centralization is inherent in many of the stablecoins on the market, as companies like Tether and Circle ultimately have control over their tokens and can freeze tokens on-chain. However, EURCV transactions are facilitated at an even more detailed level by SG-FORGE than other stablecoins. While this centralization may be unattractive to some crypto users, it allows for more robust compliance controls and can help prevent theft.
How is the EURCV token used?
EURCV is intended to be used like any other stablecoin. As an Ethereum-based token that adheres to the ERC20 standard, it is transferable between holders and can theoretically be used in smart contract-driven decentralized applications (dapps). However, this functionality is currently limited by the approval requirement.
Conclusion
EUR CoinVertible (EURCV) is a stablecoin pegged to the value of the euro fiat currency. EURCV is issued by Societe Generale – FORGE, a subsidiary of one of France’s largest banks, Societe Generale. The legal structure ensures that segregated collateral assets support the value of EURCV, providing token holders with a direct claim on these assets. SG-FORGE manages the value of the collateral assets and publishes it publicly on a daily basis. Entities must pass SG-FORGE’s KYC and AML controls to be approved and gain access to EURCV, as a measure to comply with AML regulations. EURCV transfers between approved addresses are direct and no longer require the intervention of SG-FORGE thanks to the latest update of the smart contract.