A new euro-pegged stablecoin launched in France has been criticized over a decision to restrict peer-to-peer transactions.
French bank Societe Generale-Forge (SGF) launched the Ethereum-based stablecoin called EUR CoinVertible (EURCV) on April 20, which is available only to qualified institutional clients.
According to observers who reviewed its smart contract code, ERC-20 transfers must first be approved by a centralized registrar, presumably one controlled by the bank, before the transaction is processed.
On a April 20 cheepsmart contract engineer pseudonym “alephv.eth” explained:
“They coded it so that they have to whitelist all users, process all user transfers, and even process their ERC20 approvals before processing their ‘transferFrom’ lmao.”
She further teased the code in a separate post, stating it was a “radical commitment to inefficiency in the name of regulation.”
Non-fungible token (NFT) project founder “foobar” tweeted to his more than 127,000 followers on April 20 that it is “the worst code I’ve ever seen” and described the stablecoin as a “laughing stock.” “.
France launched a stablecoin on Ethereum and it’s the worst code I’ve ever seen
Each single ERC20 transfer must be approved on a separate eth tx filed by a centralized registrar
Laughing stock, is this your CBDC?https://t.co/hKkHiQTCyN pic.twitter.com/S6tRfh54wz
-foobar (@0xfoobar) April 20, 2023
Crypto researcher Mason Versluis also tweeted that the code was “absolutely horrible” and suggested that the French bank “stop trying to break into” cryptocurrencies.
BREAKING: France launches stablecoin on #etherealbut each transfer must be approved in a separate ETH transaction sent by a centralized registrar!
Absolutely awful. Keep your shit centralized there, stop trying to turn it into crypto.
News Via:… pic.twitter.com/mcg9fvUoSp
— MASON VERSLUIS (@MasonVersluis) April 20, 2023
Many others contributed criticism, but Ether (ETH) investor Ryan Berckman provided a more neutral analysis.
He explained that many traditional financial firms like SGF will take “baby steps” as they move towards blockchain and digital assets:
“Obviously, non-compliant, non-combinable allow list style barns will not be competitive in the marketplace. Baby steps, they come from tradfi, they will see it very soon and they will switch to a USDC style deny list.”
Berckman explained that SGF may also be wrong in its claim to be the first bank to launch an institutional stablecoin on a public blockchain. He pointed to the AUDN stablecoin minted by the National Australia Bank (NAB) on Ethereum in March, which claimed to be the second bank to launch a stablecoin.
Regardless, Berckman expects more banks to follow suit in the coming months, stating that he is “sure” that SGF will not be the last bank to launch a stablecoin on a public network.
Related: Israel’s central bank says CBDC could be issued if stablecoin usage increases
The SGF stablecoin is not intended for public use, at least to begin with.
EURCV is strictly only available to institutional clients onboarded by the bank through its Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, according to the bank’s April 20 announcement.
The stablecoin is designed to bridge the gap between assets in traditional capital markets and the digital asset ecosystem.
A total of 10 million EURCV tokens were minted on Ethereum three days ago according to Ethereum explorer Etherscan. The 10 million tokens are held by a wallet address.
The stablecoin was launched due to increasing demand for a new settlement asset to process on-chain transactions.
Magazine: Unstablecoins: Depegging, Bank Runs and Other Risks Loom
This post Euro stablecoin faces criticism of centralization
was published first on https://cointelegraph.com/news/worst-code-i-ve-ever-seen-euro-stablecoin-faces-centralization-criticism