Wednesday, May 31, 2023

Crypto Twitter Highlights The Flaws In The New Euro Stablecoin

  • Societe Generale’s new Euro-pegged stablecoin is facing criticism from the crypto community on Twitter.
  • Crypto influencers have pointed out the centralized features in the code of the Euro stablecoin.
  • All transactions will reportedly have to be approved by the bank, no peer-to-peer transactions are allowed.

The crypto community on Twitter had a field day with EURCV, the new Euro-pegged stablecoin unveiled by the crypto division of France banking giant Societe Generale. Crypto Twitter has criticized the Euro stablecoin’s code for having centralized characteristics that restrict peer-to-peer transactions and require the bank to process every transfer.

A smart contract engineer who goes by alephv.eth on Twitter tweeted her findings earlier today, which showed that SG Forge would have to initiate a blockchain transaction to process the approval of a transaction initiated by the end user of the EURCV stablecoin. The bank would essentially have to do an eth tx to process every single transfer of EURCV.

“They coded it so they have to whitelist all users, process all user transfers, and even process your ERC20 approvals before they process your ‘transferFrom’ lmao,” the smart contract engineer stated. She described it as “a radical commitment to inefficiency in the name of regulation”. The flaws were revealed after crypto experts dove into the details of the Euro stablecoin’s underlying smart contract code.

In a way, the new stablecoin takes away the essence of its crypto nature. Stablecoins transfers are supposed to be settled within seconds. However, SG Forge’s EURCV centralized features will increase the settlement time considerably since the bank would have to approve every transfer by initiating a separate ETH transaction, since the stablecoin was launched on Ethereum.

While EURCV is only available for Societe Generale’s institutional clients, its centralized attributes paint a picture of the kind of restrictions and user limitations that upcoming centralized crypto assets like central bank digital currencies (CBDC) may have.

  • Societe Generale’s new Euro-pegged stablecoin is facing criticism from the crypto community on Twitter.
  • Crypto influencers have pointed out the centralized features in the code of the Euro stablecoin.
  • All transactions will reportedly have to be approved by the bank, no peer-to-peer transactions are allowed.

The crypto community on Twitter had a field day with EURCV, the new Euro-pegged stablecoin unveiled by the crypto division of France banking giant Societe Generale. Crypto Twitter has criticized the Euro stablecoin’s code for having centralized characteristics that restrict peer-to-peer transactions and require the bank to process every transfer.

A smart contract engineer who goes by alephv.eth on Twitter tweeted her findings earlier today, which showed that SG Forge would have to initiate a blockchain transaction to process the approval of a transaction initiated by the end user of the EURCV stablecoin. The bank would essentially have to do an eth tx to process every single transfer of EURCV.

“They coded it so they have to whitelist all users, process all user transfers, and even process your ERC20 approvals before they process your ‘transferFrom’ lmao,” the smart contract engineer stated. She described it as “a radical commitment to inefficiency in the name of regulation”. The flaws were revealed after crypto experts dove into the details of the Euro stablecoin’s underlying smart contract code.

In a way, the new stablecoin takes away the essence of its crypto nature. Stablecoins transfers are supposed to be settled within seconds. However, SG Forge’s EURCV centralized features will increase the settlement time considerably since the bank would have to approve every transfer by initiating a separate ETH transaction, since the stablecoin was launched on Ethereum.

While EURCV is only available for Societe Generale’s institutional clients, its centralized attributes paint a picture of the kind of restrictions and user limitations that upcoming centralized crypto assets like central bank digital currencies (CBDC) may have.