Euro stablecoin faces centralization criticism

A new euro-pegged stablecoin released in France has drawn criticism due to its decision to limit peer-to-peer trading.

French bank Societe Generale Forge (SGF) released an Ethereum-based stablecoin, EUR CoinVertible (EURCV), on April 20th. This is only available to eligible institutional investors.

According to observers who have seen the smart contract code, ERC-20 transfers must first be approved by a central registrar (perhaps controlled by a bank) before the transaction can be processed.

April 20th Tweetpseudonymous smart contract engineer “alephv.eth” explains:

“They code it so that it has to whitelist all users, handle all user transfers, and even handle ERC20 authorization before they can handle ‘transferFrom’ lmao. bottom.”

She further mocked the code in another post. state It was a “fundamental approach to inefficiency in the name of regulation.”

“foobar”, the founder of the Nonfungible Token (NFT) project, tweeted to his over 127,000 followers on April 20th that this was “the worst code I have ever seen.” , described the stablecoin as a “laughing stock”.

France Launches Stablecoin On Ethereum With The Worst Code I’ve Ever Seen

All ERC20 single transfers must be approved in a separate eth tx sent by the centralized registrar

Is this your CBDC?https://t.co/hKkHiQTCyN pic.twitter.com/S6tRfh54wz

— Hoover (@0xfoobar) April 20, 2023

Cryptocurrency researcher Mason Verluis also tweeted that the code was “absolutely horrible” and suggested French banks “stop trying to play tricks” on cryptocurrencies.

BREAKING: France Launches Stablecoin #Ethereumbut all transfers must be approved in separate ETH transactions sent by the centralized registrar!

Absolutely terrifying. Leave centralized bullshit out there and stop trying to encrypt it.

Via News:… pic.twitter.com/mcg9fvUoSp

— Mason Versluis (@MasonVersluis) April 20, 2023

Many others have joined the criticism, but Ether (ETH) investor Ryan Berkman offered a more neutral analysis.

he explained Many traditional financial firms like SGF take “small steps” in moving to blockchain and digital assets.

“Obviously non-compliant, non-configurable, whitelist style stables will be uncompetitive in the market. Baby steps, they’re from tradfi, they’ll see it soon , will switch to a USDC-style deny list.

Berckman explained that the claim that SGF was the first bank to launch an institutional stablecoin on a public blockchain could also be false. He pointed to the AUDN stablecoin, which was issued on Ethereum by National Australia Bank (NAB) in March.

Nevertheless, Berckman said he expects more banks to make similar moves in the coming months and that SGF will not be the last bank to launch a stablecoin on public networks. “I’m sure,” he said.

Related: Central Bank of Israel says CBDC could be issued if stablecoin usage increases

SGF stablecoins are not intended for public use — at least not initially.

According to the bank’s April 20 announcement, EURCV will only be available to institutional investors registered with the bank through Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.

Stablecoins are designed to bridge the gap between traditional capital market assets and the digital asset ecosystem.

A total of 10 million EURCV tokens were issued on Ethereum three days ago according to Ethereum explorer to Etherscan. All 10 million tokens will be held in one wallet address.

Stablecoins have launched against the backdrop of growing demand for new payment assets to process on-chain transactions.

magazine: Unstablecoins: Depegging, Bank Crackdowns and Other Risks Looming