Leading U.S. banks such as Goldman Sachs (GS) and Citigroup (C) have committed a combined $270 million U.S. to a new stablecoin venture.
The banking group, which also includes Germany’s Deutsche Bank (DB), raised the funds to cover five years of operational costs for the stablecoin project.
Called “Project Faro,” the venture plans to issue a dollar-denominated stablecoin and is expected to be incorporated in the U.S. across several major lenders.
Stablecoins are cryptocurrencies whose value is pegged to an underlying asset, typically the U.S. dollar.
Project Faro is unique in that it aims to develop multiple stablecoins pegged to other G7 currencies such as the Euro.
Stablecoins are seen as less risky than other digital assets such as Bitcoin (BTC) and are at the forefront of crypto adoption among financial institutions.
In recent months, groups of banks and other financial institutions have banded together to develop stablecoins that they’ll use together and amongst themselves.
In June of this year, 140 companies joined forces to develop the Open USD stablecoin, including credit card giants Visa (V) and Mastercard (MA).
GS stock has risen 12% in the past year to trade at $910.19 U.S. per share. C stock has gained 21% in the last 12 months to trade at $122.27 U.S. a share.
