A group of major global banks, including Goldman Sachs and Citigroup, has reportedly committed around $270m to fund Project Faro, a joint venture preparing to launch a dollar-backed stablecoin.

The funding is expected to cover the venture’s operating costs for its first five years, providing a substantial financial runway before its first token reaches the market.

According to a Bloomberg report published on Tuesday, which cited people familiar with the arrangement, Santander and Deutsche Bank are among the other lenders contributing to the funding pool.

Wells Fargo, Fidelity, MUFG and Standard Bank are also involved in the initiative, which first emerged in September. Project Faro intends to incorporate in the US, with its initial product set to be a stablecoin pegged to the US dollar.

Its ambitions extend beyond the US currency. The venture plans to develop additional stablecoins linked to other G7 currencies, with a euro-backed token expected to follow.

Stablecoins are digital tokens designed to maintain a consistent value against an underlying asset, most commonly a conventional currency such as the US dollar. They have become an increasingly prominent route for traditional financial institutions to engage with digital assets and blockchain-based payment infrastructure.

Project Faro is not the only collaborative effort seeking to establish shared stablecoin infrastructure. In June, more than 140 companies, including Stripe, Visa, Mastercard and BlackRock, joined a separate initiative to develop a token known as Open USD.

The reported $270m commitment underlines the scale of institutional investment going into bank-led stablecoin projects, as established financial players explore how tokenised currencies could fit into the future of payments and financial services.

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