The Sovereignty Stack: Towards Currency Resilience in DeFi

Transcript

[music] >> Well, well, well. All right. Hello everyone. Hello everyone. Yes, that's us. So, my name is Julian. I am from Safe Labs. I'm a VP revenue relevant or important extremely important and responsible for everything monetization monetization module and and partnerships. And I'm Silvan. I'm a CPO and co-founder at Societe Generale Forge. And so, we have we are a stablecoin issuer and especially we we shoot the Euro convertible. You can call it also Euro CV or Euro your CV, as you prefer. I prefer Euro CV.

Great. So, we're talking today about sovereignty stack towards currency resilience in DeFi. So, you may be wondering what is this for a couple on stage, right? I mean, we have on the one side global systemically important bank, so G-Sip, and on the other hand it's a safe. Basically, the self-custody maxis or self-sovereignty maxis. How does this fit together? I mean, looking into I mean, there's no point in kind of comparing us in size. I think you have a balance sheet of 1.3 trillion US dollars. It's possible. You know better than me. It's perfect.

>> [laughter] >> And we at Safe are at 40 billion. We are in DeFi in crypto. We are behemoth and yet it's almost impossible to compare the size of of Societe Generale and um yeah, what SG Forge is a subsidiary of. So, let's look into why are we are here on stage together. We are here because we share one thesis. And this is it starts with the problem. And this is DeFi today day has a fatal flaw. It works for many, but certainly not for all. Actually, many many people cannot really use it. We'll get into the details here. But the point is we have joint mission and how to solve this. And

about this we kind of talk now. So, I think for everyone in the room and that is involved in the in the DeFi ecosystem and the the on-chain economy, it's quite clear that there is a a USD dominance. I think it's it speaks for itself. And so, the main the main problem is this uh this this dominance. Uh so, if we go to the next slide, it's pose a problem also for for the DeFi. As there is only dollar and there is no alternative, there is a single point of failure.

Uh so, I think what I I like to mention when I try to pose this problem is to mention Markowitz. He said that diversification is only free lunch for DeFi for DeFi for investing. But unfortunately, it's not true for DeFi user. And when today you you you are in this ecosystem, you it's it's means that you are you are applying for a USD long position, whether you want it or not. So, it's it's it's a clear problem and we we hope to uh to to to battle it with our with a new currency and a new new issue.

So, and to make it a little bit more tangible even, I want to talk about something that happened to me last year. So, I was um doing on-chain stuff, as we do. Um as we I guess all do. I hope. And I was yield having USDC in a Morpho vault managed by by Stake House on mainnet. And I was getting yield of like roughly 3.75%, so it's above the Fed rate. It somehow makes sense. Last year it was even at 5%, so it was quite good.

But what happened then is you see here on the right side the chart of dollar to euro, independent of so, just a forex change, right? So, not not independent of of stables. And that lost from January 2025 until July 13%. So, I was basically stuck in a position that's yielding five something 3.75 now. Let's say it was five last year. Over an entire year I get say 5% when I lose money on forex markets of 13% within just 7 months.

This does absolutely make no sense for me as a European. As an American, it makes sense. As a European, absolutely not. So, >> [clears throat] >> when we look into this, so that is what a colleague of mine who just joined our team on the sales side, he's from India, was sending in his very first week of us joining joining us basically mid-January. It's a picture of a printed newspaper page his parents have a a subscription on of the India Times. And what we can see here is that they are comparing basically the how the rupee was doing from 1st of January 2025 until 1st of January actually 21st of January in 2026. So,

over a year. And the rupee lost against the dollar 7% against the euro 21%. So, what we learn here is another picture like you you now have an Indian newspaper looking into forex and seeing clearly first of all their own currency is not per- forming well. But second of all, it's not the dollar that is always and for everyone the solution. In fact, here the solution would have been the euro. And so, the flight to dollar is not always the best choice. However, diversification is. And also what we can take out here is FX is risk and we need to adhere to it. So, again, it's not about euro is the best currency, we all need euro stables. It is about choice, but currently DeFi is

not giving us this choice. So yes as you said, is to provide the alternative to the to this ecosystem. And it is what we want to uh to reach with with Euro CV. Maybe you but you may be aware of what happened in the in the fiat world and the stablecoin world. Uh you can be your bank account, your cash account can be frozen. Your your money can be seized. And also sometimes some stablecoin issuer can make some some mistake and by wrongly freezing some assets. So, I would like to say that Euro CV is different.

But Euro CV as a regulated stablecoin has the same control features and USD one, so is uh I would like to say it's different, but not. We have this obligation from from a from a compliance perspective. So, in that purpose is not is not different. So, the real question is uh not if but whether the the the system stablecoin are controllable or not, because it is it is controllable and we need to accept it. The real question is how to provide a diversity diversity within this ecosystem and to give access to to the user to different stablecoin to different

to to the to the diversification one. Maybe if we can go to the next one. And so, I would like to come back on what you said on your experience. And uh we we have a lot of discussion with our let's say potential clients among many in European and to be honest, that want to have to have a strong alternative, reliable alternative within this ecosystem and not to be focused on on dollar. So, they want to choose their currency exposure mainly for risk monitoring, but also for traditional things like reporting accounting reporting or this kind of stuff.

And some things that is could be more interesting also, they want to to have stablecoins that could fit or be maybe closer in terms of of jurisdiction. So, they are more appealing for example in Europe, but it could be the case in other part of the world to not be focused on on on the USD jurisdiction, but to be focused on their own jurisdiction European for France or other other jurisdiction. So, the main thing that we want to bring with Euro CV is not this different compliance stuff. But it's to make DeFi or on-chain economy strength strength to strengthen this this economy by let's say uh

provide access to a diversity of currencies, of issuer, and of jurisdiction. And the main thing that maybe could be stressed and could be outlined on my side is uh uh SG Forge is is is a bank that is backed by Societe Generale behind us. So, it may be I I'd like to say that, but happy to have a to have a debate. But we could be the only Euro Euro stablecoin that is issued by a bank. And so, the credit risk of this stablecoin is Societe Generale. So, I think it's quite it's quite relevant for for this ecosystem to manage and to monitor risk differently.

So, the question is now how to fix the problem of this strong dependency on dollar denominated stablecoins. Um first of all, you need a way to safely buy a new asset and then also interact with lending. And we at Safe strongly believe that our solution is the best place to do it to do it. Especially when you max out on self-sovereignty. So, we have in Safe more than 1 trillion dollar processed in value.

In the smart contracts, there are roughly 50 billion monthly TV TVP we have transferred total value processed within 1 month, 50 billion. And we have at the moment 40 billion in TVL that's basically stored currently in the safes. And we have more than 60 million different safes created on chain. It's 60 million times the choice to go for max sovereignty. So, probably our smart contracts are among the most established ones on chain, the most secure ones, the most with the most linearity. It's great to see also our tech team working on those smart contracts in the fourth, fifth row here.

So, if you want to talk to them. And and one point that is extremely important for our GTM this year and and and what we will focus on. So, there are plenty of solutions for retail to do self-custody. But there's not so many solutions. In fact, we believe only safe multi-sig is the one solution that caters to enterprise who want to max out on self-sovereignty. It's certainly not custodian. There are other solutions like MPC, but here you have a very very strong vendor lock-in. That is not the case with safe wallet.

So, if we talk about the dollar dependency and bring birth to a new asset that we will now hear more about from Sevan, then it is equally important to also bring this value, this core value of disintermediation to crypto and not just retail, but even to enterprise. And that's the infrastructure we are building. And so, I would like also to outline this partnership because um to be honest, to to we are a bank, so we we we took some time to to execute all the partnership we we have. Especially centralized exchange or other broker and so on.

We considered also DeFi as maybe last year. And in DeFi, it was a protocol, but also wallet provider. So, it's something that is very important. And the main point that is difficult in this stablecoin ecosystem is all the the bootstrapping of the how to set up a new currency. And so, at the beginning when we we started to to to think about about it, how to bootstrap and to create this this money on chain, this new currency on chain, it was always not to to ensure that we would have the validation from compliance, we have the validation from from from Societe

Generale to go through POC or let's say comfortable use case like payment or or settlement. But now we are we are we are we are convinced that unfortunately because it's expensive that the to bootstrap a currency, it will go through a deep and and reliable liquidity. And to be honest, your your figure that you showed is really impressive. It's really really impressive. And it is what you enable for us.

I mean that thanks to you and this ecosystem, you provide us with a trusted access to a liquidity because well, as you you are one of the trust main trusted wallet in the in the in the ecosystem, you can leverage on it. And so, in return, we are committed also to a but to to work to make this currency as as a real currency as not a product. And so, on our side, we are now we are we push a lot to a but to to improve the the feature for swap, for liquidity and so on. So, I think it's quite important to to support the increase of the market cap through through swaps, through AMM and also

through through your interface that could optimize the route to for for that. We also want to bring to the repo on chain ecosystem some institutionals. So, we discuss with some with some partners that could be interesting to deposit, but also to borrow on the on the on the on the lending protocols, on the repo protocol. And also, we we want to make sure that EURCV is considered as a safe asset. And we want to bring you but we want you to consider that the EURCV is a big partner and because it is relevant, because it's strategic, because all the audit and all the compliance we have around us is not only painful and pretty, but it's also good

for for the ecosystem. So, that's this that's we we hope that it will bring that. And so, maybe and I hope and I'm pretty convinced that in the future and it will be after to bring to build this liquidity that convertible will will be used for the end goal for any currency, for any stablecoin that is payment and and settlement. But well, we need to work on it parallelly, but the this first step to build the liquidity and is really important. So, I want to stress out to stress this this partnership.

>> [snorts] >> Maybe I can also give you some two words on this on this synergy because the the main points and that is um quite let's say difficult when we speak internally about an actor like you that is let's say a permissionless. We cannot do that without KYC. The KYC is everywhere in the bank. So, the topic we we we spend a lot of time on. And so, the real innovation of this partnership is is that point. It means that we were able to to partner with let's say non-custodial wallet to consider it like a distributor like

like any broker, but on chain broker without KYC and even if it's without KYC, the compliance and Societe Generale was comfortable with this setup because the innovation rely not on the KYC, but rely on all the on chain transparency. Well, sometimes there is a difficulty because they want data protection and so on, but let's say that it was quite comfortable for our compliance to consider that because you have a KYC, because as a stablecoin issuer, we have some um we have some constraint and some well, obligation to monitor the circulating supply. In this case, you don't need to have KYC embedded in the protocol and you can do it.

>> [clears throat] >> So, it's a it's a good it's a good innovation. And as also testament of this moment where GSIB is considering us the self-sovereignty maxis as the launchpad for a fully regulated asset, I think yeah, we are very proud of this. And we can see. It's a it's a good thing to to show. So, the demand start to to pick up. We have now $7.50 in it. No, it's a missing. >> [laughter] >> It's 7.5 million.

And yes, so so I consider that in the list we are the the biggest earn vault Correct. Within your The list on the right side is showing our earn feature and the Morpho markets we have listed in safe wallet. And within 2 weeks, I think the EURCV vault was the biggest. So, it's quite good. And of course, we are at the bootstrapping phase. So, of course, we are we we help to to attract this this liquidity. You showed the the API is quite impressive, but be sure that it will be a little bit less with the the increase of the of the AMM, but there is demand for euros, there is demand for this kind of new asset. So, especially since the USD decreased

significantly against the dollar, but it's really good to see that. >> [clears throat] >> Yes, and almost wrapping up here. Um This is a truly European project. We have safe wallet originated from Berlin with the ecosystem foundation in Switzerland. We have SG Forge as a daughter company of Societe Generale based in in Paris. We have Morpho also originated from France, Stakehound I think mostly European team. And then also Kiln as the widget provider also based in in Paris. So, it's almost a French-German partnership here.

>> [laughter] >> Exactly. But like what's very important for me to stress here, this is not about like not American. It's not about anti-American. It's not about anti-Circle. Hi, Patrick. No, it is about um giving choice in terms of the tech stack in the infrastructure, giving choice about kind of the UI you use, giving choice of the asset issuer, the high quality asset issuer that people can choose not just to diversify on the currency risk and being in euro rather than in dollar, but also being diversified with regards to jurisdictional risk, also issuer risk and many more things. And I think this is this is really interesting that this is possible. And we want to encourage everyone to diversify not just in the

assets you have because you have, I don't know, a small beta and like uncorrelated assets or whatsoever, but also look deeper into the infrastructure. Is is this the infrastructure you want to build on? And that example that we are talking here about today is a perfect example indicating that this is possible. That's your slide. Yeah. No, there's something to to wrap up the this discussion. I think as a bank, we prove that we are we are comfortable with DeFi, we are comfortable with protocol without let's say regular compliance or like bank compliance standing rate.

And so, now we are Okay. Okay, now well, don't hesitate to EURCV is at your service. You can build on top of uh of this uh this double coin. We are here to stay now. We can we prove that we we can make something a lot of things with the with the ecosystem. So, let's connect and discuss what we can do with the euro and to ensure that there is diversification in this ecosystem because dollar is really a let's say a a single point of failure that is that need to be concerned. Yeah, [clears throat] towards more self-sovereignty. Thank you.

Thank you. Well, well, well. [music] Well,