France’s euro stablecoin roasted by Crypto Twitter pundits

On April 20, French banking giant Société Générale launched a CBDC-type Euro-pegged stablecoin — and the crypto community has already spotted a number of issues in its codebase.

Central bank of France building, art generated by Midjourney

Société Générale’s digital assets-focused subsidiary, SG-Forge, has unveiled a euro stablecoin on Ethereum called EUR CoinVertible (EURCV). The asset is said to be the first-ever institutional stablecoin deployed on a public blockchain.

EURCV will be only available to the bank’s KYCed institutional clients and will be listed on reputable crypto exchanges in the coming months.

According to SG-Forge, the goal is to address growing client demand for a robust settlement asset for on-chain transactions, as well as a reliable solution for on-chain liquidity funding, corporate treasury, cash management, and cash pooling activities.

In an official statement, SG-Forge CEO Jean-Marc Stenger lauded EURCV as a “major step in Société Générale–FORGE’s roadmap to deliver innovative solutions to its clients, either real-money institutions and corporates or entities of the crypto industry, and to facilitate the emergence of new market infrastructures based on blockchain technology.”

Read also: A digital euro must ensure a high level of privacy, EU policymakers say

Stenger also expressed the belief that bank stablecoins “will be a key element to increase trust and confidence in the native crypto ecosystem.” Crypto Twitter, however, was not impressed with France’s CBDC — and advised the “suits” to keep their innovations away from crypto.

Since EURCV is an ERC-20 token, its underlying smart contract can be reviewed by outsiders — and several crypto developers took off to Twitter to share their observations and mock the inefficient design of what was supposed to be a breakthrough in fintech.

Software engineer 0xCygaar observed that the EURCV code allows a centralized registrar to withdraw all money from one’s balance and then burn them.

“What's the point of making this an ERC20? They'd be much better off using Onyx (JPM's internal system) or some internal db since they're looking for a centralized settlement layer. An ERC20 token does not fit their use case,” the developer opined.

For context, the US banking giant JPMorgan has been operating its JP Coin CBDC for cross-border payments since 2020, but, unlike EURCV, it trades on the bank's permissioned blockchain protocol Onyx, not a public network.

Pseudonymous smart contract developer alephv.eth also noticed that a centralized registrar needs to approve every single transfer on the network before the transaction is processed.

“They coded it so they have to whitelist all users, process all user transfers, and even process your ERC20 approvals before they process your 'transferFrom' lmao,” she said, adding that “such a radical commitment to inefficiency in the name of regulation could only come from a French bank.”

“What if we made an ERC20 but instead of settling in seconds, you still have to wait for the back-office fax,” quipped DeFi developer 0xfoobar.

But all jokes aside, the new euro-pegged stablecoin and its concerning design confirms the worst fears of CBDC opponents, who are worried that the new asset class will give governments more control over people’s money.

“In fact, CBDCs are systems of control, worse than bank accounts, certainly worse than paper cash, worse than stablecoins, and much worse than Bitcoin,” Blockstream CEO Adam Back opined in July.

Earlier this year, Tom Emmer, a Republican congressman for the district of Minnesota, introduced “the CBDC Anti-Surveillance State Act,” seeking to bar the US Federal Reserve from issuing a dollar-pegged CBDC.