The new stablecoin EURCV from Société Générale – FORGE did not have a unanimous reception. Observers have strongly criticized the content of the smart contract code, which they consider “against the principle of the blockchain”.
The EURCV smart contract criticized
Société Générale – FORGE yesterday announced its stablecoin “CoinVertible” (EURCV). Although considered a real step for the bank towards the crypto-asset sector, this one was strongly criticized (even mocked) on social networksespecially because of the way in which it is developed.
Observers who have examined the code of the smart contracts have not minced their words. The Internet user 0xfoobar said this code is “the worst ever”while alephv.eth (a domain expert) explained on Twitter:
“They coded it [le smart contract] such that they have to whitelist all users, process all user transfers, and even process your ERC20 approvals before processing your transferFrom. »
In other words, EURCV transfers must always be approved by an entity before being processed. Presumably, the bank will control this step itself. According to observers, this element involves several problems.
First of all, this would make the smart-contract counterproductive, even useless. Instead of being able to make transfers in a few seconds thanks to the blockchain, we would return to a system in which we have to wait for any procedure involving humans behind their desks.
Then, the systematic validation of transactions by the bank could end up incurring exorbitant fees in the futureespecially in a period of high use of the Ethereum (ETH) blockchain.
👉 On this theme – Société Générale – FORGE launches CoinVertible (EURCV)*
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A regulatory aspect that weighs on the EURCV
In a context where stablecoins are increasingly observed by regulators, Société Générale – FORGE emphasized the regulatory aspect. Thus, the EURCV was designed to be defined as a ” digital asset », as mentioned in the Monetary and Financial Code.
Thus, it must meet strict criteria in its design, whether in terms of reserves, interoperability, issuance and transactions. Moreover, it will be restricted to institutional actors Who “meet regulatory compliance requirements” determined by Société Générale – FORGE.
For all these reasons, it is therefore not surprising that the EURCV smart contract code imposes certain binding steps but probably essential to comply with the regulations.
Moreover, some points mentioned by observers are not entirely true. Indeed, many are those who are concerned about the presence“a function allowing the bank to withdraw all your funds”.It should be noted that this is not a bug and that the pointing function is also present in the code of USDC and USDT stablecoins.
Still, the stablecoin has been launched following a growing demand from institutions for a new asset to process transactions on the blockchain. There is a good chance that other banks will follow the movement initiated by Société Générale – FORGE and launch their own stablecoin in the coming months.
👉 To go further – Stablecoin, all about this type of cryptocurrency
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