What are Société Générale's ambitions in the crypto universe? If the question was still worth asking two years ago, things seem pretty clear: they are big, and the latest Forge project is the best illustration of that.
The French bank's crypto subsidiary founded in 2018 announced on April 20 the launch of CoinVertible, a euro stablecoin based on the Ethereum blockchain, in other words a public protocol, which is a first for a bank.
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CoinVertible is intended for Societe Generale's institutional clients (asset managers, institutions, insurers, etc.). This project should mainly serve to fluidify the transactions of security tokens (tokens that represent financial securities such as shares, editor's note), a subject on which the bank based in La Défense, next to Paris, is at the forefront.
In 2019, the bank had issued a €100 million bond in the form of security tokens via the Ethereum blockchain. In 2021, it had been the first bank to release a structured product directly registered on the blockchain (this time Tezos). Except that each time, the regulation of these transactions were done in a parallel way with traditional currencies. The idea of this stablecoin is to act as a means of onchain payment and thus accelerate the adoption of tokenized assets.
"It was a request from our customers for a little while, they needed a settlement token whose value is stable and which is natively on the blockchain," explains Jean-Marc Stenger, Forge's boss.
"We're seeing a higher-than-expected adoption curve in the tokenization market, with many other banks now working on these topics, which was not the case two years ago," he continues.
This stablecoin is special and differs from other familiar projects in the crypto community, especially in terms of control. For a transaction to be validated, it is mandatory that Societe Generale gives its approval. The bank can also destroy the stablecoins on an address it does not control.
These parameters have provoked many reactions and harsh comments on social networks. Some people spoke of a "public" stablecoin in name only. "It is important to understand that our project has nothing to do with stablecoins intended for the general public," says Jean-Marc Stenger. "CoinVertible is designed for specific uses reserved exclusively for qualified institutional clients," he warns, in response to the criticism of its lack of decentralization.
Societe Generale is not only targeting traditional players, however, and its goal is also to address a web3 customer base: Exchanges, brokers and crypto asset managers. CoinVertible will also be able to be integrated into transactions made via the Maker decentralized finance protocol that Forge has been working on for several months.
Last January, the bank took out a loan using digital assets placed as collateral. Other experiments should follow with other DeFi players.