The French Societe Generale said on Tuesday that it plans to launch a public negotiable, backed in dollars Stablecoin through its subsidiary for digital assets, making it the first major bank to enter the developing market for the cryptocurrencies associated with the dollar.

The new digital currency, named “USD Coinvertible”, will be issued both in the Ethereum block chain and in the Solana chain, while public negotiation is expected to begin in July, SGGen’s encryption arm, SG-Forge, said in a statement Tuesday. Bny Mellon will serve as a guardian for Stablecoin’s reserves, the bank said.

What are stablecoins

Stablecoins is a type of cryptocurrency that is usually associated with a traditional currency, usually the dollar, allowing people to distribute large sums of money using blockchain networks instead of traditional bank payment systems.

The sector has experienced rapid growth, driving the Tether encryption company, which has issued $ 155 billion from its tokens dollar.

SG-Forge has launched a € 2023 stablecoin, although it has not been widely adopted, with only 41.8m euros ($ 47.62 million) in circulation, according to its website.

Soocgen said its Stablecoins are classified as brands of electronic money and will be regulated by Mica, the European Union Regulation of the European Union for the encryption approved in 2023, the Reuters news agency notes.

Jean-Marc Stenger, CEO of SG-Forge, said there is a demand for a dollar-based stablecoin.
“At the moment, there are no other players related to banks in this area … This is definitely the feedback we have from the market, both from companies, financial institutions, and encryption exchanges,” he said. “There is a very, very high need for a well -adjustable, strong offer in the field of cryptocurrencies and stablecoin.”

Where can be used

SG-Forge stressed that its token can be used for encryption transactions, cross-border payments, foreign exchange and cash management and cash management and will be introduced into various encryption exchanges, without giving further details.

The subsidiary has “more than 15” encryption exchange and brokers who have been integrated as customers, Stenger added.

In the US, Congress is ready to pass legislation to create a regulatory framework for Stablecoins. Bank of America could launch a stablecoin, as its chief executive said earlier this year, and some other big banks are considering issuing a common stablecoin.

However, regulators have long warned that stablecoins could affect market stability.