A consortium of 21 financial institutions has allocated approximately $270 million in funding to a stablecoin initiative known as Project Faro. The project, backed by major banks, intends to act as the stablecoin issuer and launch a US dollar-backed stablecoin in the first half of 2027.
According to Bloomberg, the funding is intended to cover five years of operations for the new company, which plans to issue stablecoins pegged to the currencies of all G7 countries; it is expected that the launch of the dollar-backed coin will be followed by a coin backed by the euro, reports cointelegraph-ru.com.
The group first announced the initiative in September. Bloomberg reported that, although few details have been confirmed, people familiar with the matter say the company is expected to be registered in the US.
The group includes banks such as Citigroup, Goldman Sachs, Banco Santander, Deutsche Bank and BBVA. Other initiatives are also underway, including Open USD, led by Stripe – whose founders include Visa – and Qivalis, a European banking consortium seeking to challenge the dominance of US dollar-pegged stablecoins.
Overlap with competing consortia
BBVA is one of several Faro participants also involved in competing stablecoin initiatives, including Open USD and Qivalis. The Dutch bank Rabobank is also a Faro participant and joined Qivalis in May, when the European consortium added 25 banks, bringing the total number of participants to 37. BNP Paribas was among the 10 banks that first explored the initiative – which later became Faro – in October 2025, before subsequently joining Qivalis.
Since then, Qivalis has made progress on the regulatory front, having received authorisation from the Dutch central bank in October 2026 to operate as an electronic money institution. The consortium is preparing to launch a fully regulated euro-denominated stablecoin and plans to make it available for payments, cross-border settlements and transactions involving tokenised assets.
This overlap indicates that traditional financial institutions are positioning themselves across several initiatives rather than placing all their eggs in one basket by focusing exclusively on a single stablecoin project.
By participating in competing projects, banks can explore different approaches to the issuance and distribution of digital currencies, whilst retaining a stake in the infrastructure that could form the basis of future payment and settlement systems.
A saturated market
Despite growing interest from institutional participants, Faro is entering a market dominated by two crypto-native issuers.
According to DefiLlama, as at 10 November, Tether’s USDT and Circle’s USDC accounted for around 85 per cent of the stablecoin market, with a total volume of approximately $290 billion. USDT’s market capitalisation stood at around $176.3 billion, whilst USDC accounted for approximately $70.4 billion.
However, distribution could give the bank-backed project a competitive advantage. The institutions participating in Faro already have an established customer base of banks, payment networks and connections with companies and financial institutions, which could help to distribute the new stablecoin.
Rather than building a completely new customer base, the consortium can utilise existing connections to introduce its stablecoin to new audiences, including retail users. Open USD, developed by the Open Standard consortium, takes a similar approach, bringing together payment providers, banks, fintech companies and merchants around a shared stablecoin infrastructure.
For both projects, the challenge will be to transform existing financial infrastructure and customer relationships into a competitive on-chain payment network.
This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.
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