The unveiling of the new Euro-pegged stablecoin, EURCV, by Societe Generale’s crypto division has caused quite a stir in the crypto community on Twitter. While the launch of a new stablecoin is usually met with excitement, crypto Twitter has been quick to criticize EURCV’s centralized characteristics that restrict peer-to-peer transactions and require the bank to process every transfer.
Smart contract engineer alephv.eth took to Twitter to share her findings, revealing that SG Forge would have to initiate a blockchain transaction to process the approval of a transaction initiated by the end user of the EURCV stablecoin. This means that the bank would have to do an eth tx to process every single transfer of EURCV. The flaws in the stablecoin’s underlying smart contract code were quickly picked up on by crypto experts.
The centralized features of EURCV have taken away the essence of its crypto nature. Stablecoin transfers are supposed to be settled within seconds, but SG Forge’s EURCV centralized features will increase the settlement time considerably since the bank would have to approve every transfer by initiating a separate ETH transaction. This is a significant drawback, especially since the stablecoin was launched on Ethereum.
It is important to note that EURCV is only available for Societe Generale’s institutional clients. However, its centralized attributes paint a picture of the kind of restrictions and user limitations that upcoming centralized crypto assets like central bank digital currencies (CBDC) may have. This highlights the need for regulators to strike a balance between regulation and innovation in the crypto space.
While the flaws in EURCV’s code have been pointed out, it is worth noting that stablecoins are becoming increasingly popular in the crypto space. They offer a way to mitigate price volatility and provide a stable store of value. However, the success of stablecoins is dependent on their ability to remain decentralized and offer fast settlement times.
In conclusion, the unveiling of EURCV has highlighted the need for stablecoins to remain true to their crypto nature and offer fast settlement times. The flaws in the stablecoin’s code have also highlighted the need for regulators to strike a balance between regulation and innovation in the crypto space.
