Société Générale Is Launching the First Dollar Stablecoin Issued by a Bank on a Public Blockchain

French banking giant Société Générale is preparing to roll out the first dollar stablecoin ever issued by a bank on a public blockchain.

French banking giant Société Générale is preparing to launch the first dollar stablecoin issued by a bank on a public blockchain, marking a significant entry into this rapidly growing sector, the sources said.

The move comes as the total capitalization of stablecoins approaches $250 billion.

Société Générale, through its crypto subsidiary SG Forge, will be introducing the asset, initially running on Ethereum and later expanding to other public networks like Solana.

The product will be focused on institutional investors, especially within the European Union, where demand for tokenized dollar liquidity has been increasing. SG Forge possesses an e-money license, permitting it to offer such assets under EU regulations—a legal advantage that has limited other issuers in this domain.

Until now, no international banking institution has issued a dollar stablecoin on a public blockchain. While JPMorgan developed its own token, JPM Coin, it operates on a private network and is restricted to the bank’s corporate clients. SG Forge's strategy involves bringing this asset type into a public, accessible sphere for external institutional actors.

"No bank has yet issued a classic dollar stablecoin on a public blockchain for institutional clients in the manner that we envision," one of the sources stated.

However, this domain is already occupied by renowned cryptocurrency firms. Circle's USDC and Tether's USDT are the leading stablecoins, both boasting significant trading volumes and integration with major cryptocurrency exchanges.

Moreover, Mastercard, Visa, and Stripe are developing products to integrate stablecoins into traditional payment systems.

The European Union is also working on integrating cryptocurrencies into its legal framework through the Markets in Crypto Assets (MiCA) regulation, which is set to come into effect in early 2024.

This new legislation will introduce a clear definition of cryptocurrencies and establish rules for their issuance and use.

Earlier this year, SG Forge launched EURCV, a euro-denominated stablecoin also issued on Ethereum.

Despite this launch, the euro stablecoin market has seen minimal growth, with only €300 million in assets circulating and heavy regulatory restrictions imposed by MiCA. Out of this total, only €40 million belongs to EURCV.

The European framework, which mandates high reserve levels and intricate operational requirements, has slowed adoption and led companies like Tether to withdraw their products from the region, as evident in the case of USDT.

In contrast, the dollar stablecoin market continues to expand rapidly.