Yesterday, a new stablecoin called Euro CoinVertible was introduced on Ethereum by a subsidiary of Societe Generale, a French bank.
However, it has been discovered that the code of the smart contract was written poorly.
After an audit of the EURCV code by developers from the crypto community, it was revealed that control over transactions in the token was a fundamental principle for creating a stablecoin.
This means that every transfer must be confirmed by a separate transaction from a centralized registrar that is likely controlled by the bank.
“They programmed the smart contract so that they must whitelist all users, process all transfers, and even ERC-20 confirmations before approving the transaction itself.
This is a prime example of inefficiency for the sake of regulation,” commented a smart contract engineer who goes by the pseudonym alephv.eth.
Foobar’s founder also criticized the code, stating that it’s “the worst code he has ever seen in his entire life” and called it “a laughing stock”.
Cryptocurrency analyst Mason Versluis similarly stated that the stablecoin code is “absolutely terrible” and suggested that Societe Generale should stay away from the cryptocurrency industry altogether.
Nonetheless, Ryan Berkman, an investor, defended the French bank, claiming that Societe Generale is taking “first steps” in the cryptocurrency field and that the developers will change the smart contract code as they gain more experience.
He also anticipates more traditional banks launching stablecoins on public blockchains.
To note, Euro CoinVertible is a stablecoin tied to the euro and is intended for qualified institutional investors of Societe Generale.