The Big Whale: For months you've been working to comply with MiCA regulation. Now that it has come into force (30 June), you'll be able to focus on developing your stablecoin (EURCV), which is still very small compared with industry giants like USDT and USDC. What is your strategy?
Jean-Marc Stenger: Indeed, our goal now is to succeed in developing our stablecoin at a time when MiCA has tightened the constraints on stablecoin distribution. Everything is still not very clear, particularly on the Exchanges and for certain users, but we know that the regulator will soon clarify things. At least that's what we're hearing from our side.
Do you consider that the entry into force of the stablecoin component of MiCA has been a failure?
No, but what is certain is that everything is not yet totally clear and that there are points to be clarified. In the meantime, our strategy is clear: we have chosen not to attack the market directly and to interface with a number of business partners, such as Bitstamp, which distributes our stablecoin.
Today, the platform (currently being bought by Robinhood, editor's note) does even more than distribute EURCV, since a Coinvertible customer who wants to switch back to euros can do so directly via Bitstamp. We are going to multiply these partnerships. We are in the final phase of onboarding with other Exchanges.
Will you continue to do this with European Exchanges or potentially with Exchanges in Asia and North America?
In theory, we could do it with partners in Asia or North America, but for the moment, we're concentrating our efforts on Europe, so the partners will be European.
Beyond the Exchanges, the idea is obviously to form partnerships with other market players such as market makers and brokers. A large proportion of volumes go through these companies. We have already announced partnerships with Wintermute and Flowdesk, which is a very interesting new channel for us. Other market makers are in the pipeline.
We are also targeting the major providers of crypto custody solutions. Any customer, any user has to work with a wallet and so these wallets have to be able to support EURCV.
Finally, there are all the DeFi ecosystems and liquidity pools that we're going to address. We have already been in discussions for weeks with DeFi players. For the moment, it's still educational, the aim being for us to explain how the EURCV works and to say what our constraints are with MiCA.
We need to do a lot of teaching on how the smart contract works, on our white listening. Being MiCA compliant changes the game a bit. The aim is for these lending pools to be able to offer EURCV in their applications in the coming weeks.
Who is your stablecoin aimed at?
We're targeting two main customer families.
On the one hand, there's the crypto customer base, and here we're in the playground of existing stablecoins that allow you to invest and navigate in this universe (USDC, USDT , etc).
On the other side, there are traditional businesses and financial institutions which, it is our belief, will increasingly use stablecoins as a payment and delivery instrument in a universe that goes well beyond crypto.
Our bet really is that the currency will go digital and that it will serve both crypto and more traditional ecosystems. Our strategy is really to be present on both sides. In fact, that's why we had to make some structuring choices to make sure we could address both markets...
We do remember some of the criticism at the launch of EURCV, which was seen as a stablecoin in name only because it was too centralised and controlled by Société Générale....
When you look at things solely through the crypto prism, some choices may indeed seem anomalous, such as being able to block a transaction, but our choice has always been to go gradually because we want to be able to address both worlds, particularly that of traditional finance where there are very strong rules and constraints.
Why is it so important to have euro stablecoins like EURCV?
There are two levels of answer. Firstly, from a business point of view for Societe Generale, this is a market that is both completely new and considerable, so it is essential to be present. There are very few players positioned in this market, so we have both the opportunity to participate in structuring it and at the same time become a major player.
We're now talking about a global market worth more than $160 billion, which is significant, and which is also highly polarised with only two major players, the USDT (Tether) and USDC (Circle), which are dollar stablecoins and not euro.
In this context, we have a real place to take in the stablecoin market. As well as being one of the only offshoots of a bank in crypto, we are one of the few players that can lay claim to an important place in this market.
Isn't this also a matter of sovereignty?
Yes, and that's the second point I wanted to emphasise. There have to be European players who count in this market. It's a question of monetary sovereignty. With the USDC and the USDT , the United States has started to digitise the dollar, and we need to do the same with the euro.
We need Europe to have these kinds of products with appropriate regulation. As Jeremy Allaire (head of Circle, editor's note) pointed out in an interview with you, it's interesting to see that Europe was the first to regulate the digital dollar. Now we also need a digital euro.
In the future, there could be dozens, even hundreds of different stablecoins. Is this a problem? How will people find their way around? Why haven't you launched your stablecoin with partners?
That's an excellent point, but first of all, I think we need to get our minds off the analogy we spontaneously make between stablecoins and notes and coins, because they're not necessarily the same thing.
Today, on the one hand, there is central bank money, i.e. the money we have in our wallets, and then there is commercial money which is issued by banks through the entry on their balance sheet and which is used on monetary exchanges.
Tomorrow, the currency we have in our wallets will be replaced by tokens issued by the European Central Bank that will be available in our mobile phones.
Also, for exchanges either on capital markets or then operations in the crypto world, we will have stablecoins like EURCV. But I don't think we'll see many of them because the market is very high. The breakeven point for activity is very high and not everyone has the backbone to manage this kind of activity.
In reality, these are markets that are pushing more for consolidation and a concentration of liquidity on certain products. In fact, it is precisely for this reason that these products are heavily regulated with all the constraints you know.
Stablecoins are critical assets in the functioning of the crypto ecosystem, so there are bound to be barriers, either regulatory or market barriers that will be established very quickly. I think that's why there won't be many credible stablecoins globally. There will be 5 or 6 very large and global ones, and after that there could be a slew of them, but very small and very specific, and probably doomed to disappear quickly.
To be a "global" player, you have to be usable everywhere. The USDC and USDT can be used to buy bread. Is this the case with the EURCV?
The EURCV was not designed for this. If the Parisian baker accepted payments in crypto, it would be possible, technically and financially, but in this specific case, I think it will be much more practical to pay with central bank digital currencies.
On the other hand, in the crypto world, EURCV is going to be much more useful for lending protocols (lending and borrowing), for example. A lending protocol is a DAO-style dematerialised bank. In the end, when you strip away all the smoke and concepts, that's what's left. For these applications, we will need digital cash, and we hope that EURCV will be the right answer.
What do you see as the big difference between what BlackRock is doing with its BUIDL fund and what you are doing?
There are several digital cash models, but I think the most relevant model when we talk about digital cash is stablecoin.
An asset manager who tokenises a money market fund is still a tokenised money market fund. In the same way, a tokenised government bond remains a government bond, as defined by law.
When JP Morgan launched its JPM Coin, we were talking about a tokenised bank account, not digital cash. There are tokenised funds, tokenised bonds, tokenised bank accounts and tokenised cash. There's a reason why specific regulations were invented for stablecoins, which are tokenised cash.
What should encourage businesses and individuals to use your stablecoin?
Stablecoins are the best way to get into crypto, because they're simple to understand: a stablecoin is worth 1 for 1 and they allow you to on-ramp and off-ramp, i.e. move from one world to another without friction.
We must not lose sight of the fact that we will continue to live in a world where there will be real cash with companies that have 'real' trade, and that we will hybridize this world with the crypto world and that the bridge between the two worlds will effectively be stablecoins.
