NEW YORK—A consortium of major global banks and financial firms has committed about $270 million to a planned U.S. dollar stablecoin venture, providing funding for five years of operations as traditional financial institutions prepare to compete in a market dominated by cryptocurrency companies.
Goldman Sachs, Citigroup, Banco Santander and Deutsche Bank are among the backers of the initiative, internally known as Project Faro, Bloomberg reported, citing people familiar with the matter. CoinDeskalso reported the commitment, which is intended to finance the operations of a new U.S.-incorporated issuer.
The planned stablecoin, a digital token designed to maintain a fixed value against the dollar, is expected to reach the market in the first half of 2027. The consortium also intends to explore tokens tied to other Group of Seven currencies, with a euro-denominated product a priority.
The $270 million commitment is for operating expenses, not the reserves that would back the stablecoin. The participating institutions previously described plans for a digital asset backed one-for-one by reserves and available on public blockchains.
Other Plans Also Announced
In September, 21 financial institutions announced plans to establish a company to issue the stablecoin, subject to closing conditions. The group includes Bank of America, Capital One, Wells Fargo, PNC Financial Services, Fidelity Investments, UBS, Lloyds Banking Group and other firms across five continents, according to the consortium’s announcement published by Wells Fargo.
The institutions said the proposed product could be used for cross-border payments, digital asset settlements and other wholesale, institutional and retail transactions. They also said the venture intends to comply with applicable U.S. and European stablecoin regulations.
The effort would put some of the world’s largest financial institutions in more direct competition with established stablecoin issuers Tether and Circle. Those companies’ dollar-linked tokens account for most of the market, according to cryptocurrency industry reporting.
No Guarantee of Widespread Use
However, a bank-backed stablecoin is not guaranteed to attract widespread use. Reuters reported in September that demand for new bank-issued tokens remained uncertain, even as financial institutions increasingly explored blockchain-based payments.
CoinDesk reported that participating banks had not immediately responded to requests for comment on the new funding commitment. The venture has not announced a final public name or a completed product launch.
