SINGAPORE - A major French bank’s digital asset arm has listed its stablecoin on European exchange Bitstamp, which is seeking a licence in Singapore.

Societe Generale, France’s third-largest listed bank, is the first past the post in what could be a trend in 2024, with institutional players showing a keen interest in issuing their own stablecoins.

Its subsidiary, Societe Generale-Forge, on Dec 6 issued its euro-pegged stablecoin or EUR CoinVertible (EURCV) on the Ethereum public blockchain.

A stablecoin is a digital token that is usually pegged to a major currency on a one-to-one basis.

The subsidiary said in its white paper that the stablecoin will be backed only by cash deposits opened in reputable credit institutions and high-quality securities.

It said the listing is to cater to customer demand for a robust settlement and store-of-value asset for on-chain transactions.

There has also been demand for an innovative solution for cash management and cash pooling activities, as well as enhanced collateral management, the subsidiary added.

Mr Jean-Marc Stenger, chief executive of Societe Generale-Forge, said the listing offers the opportunity to the crypto ecosystem to diversify its positions and gain access to an asset built on the bank’s regulatory and structuring expertise.

“This is an important step towards widespread adoption of our stablecoin.”

Mr Jean-Baptiste Graftieaux, chief executive of Bitstamp, said this is the first euro-pegged stablecoin that is issued by a fully regulated subsidiary of a global bank.

“Stablecoins bridge the gap between traditional fiat currencies and cryptocurrencies – offering the best of both worlds due to their stability and on-chain feature set – whilst also supporting our goal of increased financial inclusion.”

Mr Graftieaux added that the partnership is the next step in building markets beyond the current dominance of United States dollar-backed stablecoins.

The market capitalisation of stablecoins totalled about US$128.8 billion (S$172.6 billion) as at Dec 6, according to CoinMarketCap.

In recent months, institutional players have expressed interest in issuing their own stablecoins, a move that has been welcomed by the digital asset sector, which has suffered a long crypto winter following the crashes of prominent players in 2022.

Small and large Japanese banks, for instance, have been gearing up to launch their stablecoins since legislation kicked in in mid-2023.

It comes after Japan passed a law in June 2022 governing stablecoins, defining them essentially as digital money.

Months later, the country’s Financial Services Agency lifted a ban on foreign-issued stablecoins.

Stablecoin regulations are being firmed up in various jurisdictions, including Singapore, and market players said the clarity will drive stablecoin adoption and usage.

In August, the Monetary Authority of Singapore (MAS) laid out its rules for stablecoin issuers in Singapore, including having a minimum amount of reserves and allowing investors timely redemption at par value.

Mr Graftieaux said regulatory harmonisation across infrastructure players and jurisdictions, as well as access to services in which these assets are integrated, will fuel the adoption of stablecoins.

“In 2024 we see the next phase of issuance and access accelerating, with support from clarity provided by European Union, Singaporean and Japanese regulators as the standouts.”

Mr Leonard Hoh, general manager for Asia-Pacific at Bitstamp, said that for Asia and Singapore, the partnership will drive adoption to deliver efficiency for payment systems and wholesale applications, in particular.