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Stablecoins, or digital dollars backed by cash and short-term Treasuries faded from the headlines after the CLARITY Act stalled in the Senate. That doesn't appear to be stopping some of the biggest financial firms in the world, though.

Bloomberg reports that Goldman Sachs Group Inc., Citigroup Inc., Banco Santander SA and Deutsche Bank AG are committing $270 million to a joint stablecoin venture called "Project Faro."

All in, the consortium consists of 21 "leading international financial institutions," Santander said in a September 21 statement. North American members include Bank of America, Capital One, Citi, Fidelity Investments, Goldman Sachs, PNC Financial Services, Scotiabank, TD Bank Group, Wells Fargo and WisdomTree. The $270 million, which seems like next to nothing given these firms' size, will reportedly cover five years of operations for the new company. The venture plans to incorporate in the U.S. and act as the issuer of its unnamed stablecoin even though it has a launch targeted for the first half of 2027.

What's interesting is the timing of this report, one week after Democrats swept the midterms. On January 3, they will control the House and the Senate for the first time since 2023. Back then, crypto was riding a boom that ended in the 2022 crash (see FTX and Luna Terra), and many Democrats saw it mainly as a vehicle for fraud and money laundering.

Even so, Rep. Maxine Waters, who was tight with Sam Bankman-Fried until she wasn't spent 2022 trying to negotiate a stablecoin bill with Republicans. Now, with the "help" of President Trump (he was the crypto president, conflicts of interest and all) in bringing the industry mainstream, Dems are in the middle of turning Waters' Crypto Investor and Consumer Bill of Rights into their own market structure bill. In a roundabout way, that could make them the crypto party for the people. Quite a ride.

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Project Faro's consortium isn't waiting on Congress, though. Its stablecoin is being built to the GENIUS Act, which is already law. That sidesteps one of the most contentious fights in the CLARITY Act: whether stablecoins can pay yield. Faro can't, because GENIUS bars issuers from paying it. Its member banks can pay interest on deposits, though.

That's where the second track comes in.

Bank of America, Citi and Wells Fargo, all Faro members, are also building a shared tokenized deposit network through The Clearing House with JPMorgan and more than a dozen other banks. The network was announced June 5 and targets the same first-half 2027 window. That timing seems like a big tell. A tokenized deposit is still a bank deposit, so it can carry interest the way any account can. But no member bank has detailed how it will use the token. That's the biggest question mark in all of this. If they do, the banks could have a stablecoin to take on Circle's USDC and Tether's USDT, plus an on-chain dollar that pays interest, without waiting on Congress to settle the yield question.

If that's really their play, the banks are taking crypto's tech without giving up the right to pay interest, so they can hold on to their deposits and keep lending them out. To be honest, that sounds like something the banks would do, so it isn't far off. If regulators or a Democratic bill closes the rewards loophole for Coinbase and Robinhood, those platforms would be left offering stablecoins that pay nothing while the banks offer on-chain dollars that do. The powers that be stay in power while the newcomers cannibalize themselves.

JPMorgan isn't on the Faro list, likely because it already has its own deposit token, JPM Coin, unveiled in February 2019.