The global financial industry continues to transform with the rise of blockchain technology and digital assets. One of the biggest steps in banking has just been taken by French bank Societe Generale, which became the first major bank to launch a dollar-based stablecoin.
The stablecoin, called USD CoinVertible, will be available on the Ethereum and Solana blockchains, and will begin trading publicly in July 2025.
What Is Stablecoin and Why Is It Important?
Stablecoins are a type of cryptocurrency whose value is pegged to a traditional currency, usually the US dollar. Unlike cryptos like Bitcoin which have high volatility, stablecoins offer stability in value, making them more suitable for everyday financial transactions and digital asset trading.
Stablecoins allow users to move large amounts of money across blockchain networks without having to rely on traditional banking payment systems.
USD CoinVertible, Stablecoin from Societe Generale
Societe Generale is launching USD CoinVertible through its digital asset-focused subsidiary, SG-FORGE. The stablecoin will have several key features:
- Published on the Ethereum and Solana blockchains , enabling fast and efficient transactions.
- Classified as an e-money token , which means it will be regulated under the European Union's MiCA (Market in Crypto Assets) regulations.
- BNY Mellon will act as custodian of the stablecoin reserves , ensuring the security and transparency of the assets backing them.
- Can be used for crypto trading, cross-border payments, foreign exchange transactions, as well as collateral and cash management .
Why Is Societe Generale Launching a Dollar-Based Stablecoin?
Previously, SG-FORGE had launched a euro-based stablecoin in 2023, but its adoption was still limited, with only 41.8 million euros in circulation.
SG-FORGE CEO Jean-Marc Stenger said there is a huge demand for regulated and secure dollar-backed stablecoins. Currently, the stablecoin market is dominated by crypto companies such as Tether and Circle, which have issued more than $155 billion worth of stablecoins.
By launching USD CoinVertible, Societe Generale hopes to offer a more transparent and regulated alternative for companies, financial institutions and crypto exchanges.
Impact on the Financial Industry
Societe Generale’s move marks a major shift in the adoption of stablecoins by traditional financial institutions. Previously, stablecoins were mostly issued by tech and crypto companies, but now big banks are starting to enter the market.
Some of the key impacts of the USD CoinVertible launch include:
- Increase trust in stablecoins , because they are issued by banks that have strict regulations.
- Accelerate the adoption of stablecoins in global financial transactions , especially in cross-border trade and payments.
- Encouraging other banks to follow in Societe Generale's footsteps , with several major US banks such as Bank of America and JPMorgan Chase also considering launching their own stablecoins.
Future Challenges and Prospects
While Societe Generale's launch of a stablecoin is a big step, there are some challenges to overcome:
1. Regulation and Compliance
Stablecoins still face regulatory challenges in various countries. While USD CoinVertible has met MiCA standards, regulation in the United States is still unclear, and some stablecoins have faced legal restrictions.
2. Competition with Established Stablecoins
The stablecoin market is currently dominated by Tether (USDT) and Circle (USDC), which have a market share of over 80% of the total stablecoin supply. Societe Generale must compete with these big players to gain trust and adoption from users.
3. Infrastructure and Adoption
While stablecoins offer many benefits, adoption by financial institutions and companies is still in its early stages. Societe Generale needs to ensure that USD CoinVertible can be widely used in the global financial ecosystem.
Conclusion
Societe Generale’s launch of USD CoinVertible is a major step in the world of digital finance. As the first major bank to launch a dollar-backed stablecoin, they are paving the way for more financial institutions to adopt blockchain technology and digital assets.
With strict regulation and backing from BNY Mellon, this stablecoin has the potential to become a top choice for companies and institutions looking for a secure and efficient digital payment alternative.
While it still has to compete with established stablecoins like USDT and USDC, the presence of USD CoinVertible shows that the future of stablecoins is increasingly integrated with the traditional financial system.
