Project Faro raises $270 million as 21 institutions back bank stablecoin venture
Key points
- Twenty-one institutions, including ten G-SIBs, have committed $270 million to Project Faro, a USD stablecoin joint venture planned for US incorporation.
- The G-SIB members are Goldman Sachs, Citi, UBS, Bank of America, Deutsche Bank, Banco Santander, Crédit Agricole, MUFG Bank, TD Bank, and Wells Fargo, joined by eight other banks and three non-bank institutions.
- At least seven Faro members are also shareholders in The Clearing House, which is independently building a tokenised deposit interoperability solution.
- The consortium is searching for a chief executive, and the $270 million is intended to fund operations over a five-year horizon.
- Faro's probable function is as a transit-layer stablecoin bridging siloed tokenised deposit networks rather than as a retail or yield-bearing instrument, following models already in use at Hazel Network and SoFi Bank.
Twenty-one financial institutions, including ten global systemically important banks (G-SIBs), have committed $270 million to Project Faro, a joint venture aiming to issue a USD-denominated stablecoin incorporated in the United States. The consortium, whose G-SIB members include Goldman Sachs, Citi, UBS, Bank of America, Deutsche Bank, Banco Santander, Crédit Agricole, MUFG Bank, TD Bank, and Wells Fargo, is actively searching for a chief executive and plans the funding to sustain operations for five years, according to Bloomberg. The initiative has been in development for over a year, with an expanded roster of 21 members announced in September.
The strategic logic behind Faro is less about competing with public stablecoins and more about solving a fragmentation problem within wholesale tokenised deposit infrastructure. Several member banks already operate their own tokenised deposit platforms, and at least seven are shareholders in The Clearing House, which is developing a tokenised deposit interoperability solution. Rather than functioning as a yield-bearing instrument the way USDC operates within the Coinbase ecosystem, Faro appears designed to serve as a transit layer, a stablecoin that briefly holds value while moving it between proprietary tokenised deposit networks before converting back into deposits at the receiving institution.
There is already commercial precedent for this architecture. The Hazel Network uses deposit tokens for intra-network payments but switches to a stablecoin for out-of-network transfers. SoFi Bank follows a similar pattern, converting on-chain payments to its SoFiUSD stablecoin while keeping balances as deposits. PNC, itself a Faro member, recently announced that institutional USDC receipts are automatically converted into deposits, a model that may foreshadow how Faro coins would be handled in practice. On this reading, Faro is primarily a deposit-retention mechanism with cross-network reach, potentially bridging Citi Token Services, UBS Digital Cash, and Crédit Agricole’s so|cash across borders.