Santander, Citi, Goldman Sachs, Deutsche Bank and others are collaborating on a reserve-backed digital money pilot. The project recalls Meta’s Libra but with a distinctly regulated edge.
A coalition of ten major banks, including Banco Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG, TD Bank Group, and UBS, has begun work on an initiative to explore a new form of digital money backed one-to-one by fiat reserves in G7 currencies.
According to a joint statement, the project will assess “whether a new industry-wide offering could bring the benefits of digital assets and enhance competition across the market, while ensuring full compliance with regulatory requirements and best-practice risk management.”
The group has confirmed that it is in contact with regulators and supervisors in each relevant jurisdiction, underscoring a desire to align the effort with existing rules rather than challenge them. Early indications suggest that the project will focus on tokenised representations of fiat deposits or bank-issued stablecoins, potentially operating on public blockchain infrastructure.
A coordinated push by incumbents
The collaboration marks a significant step by traditional banks into the digital-asset space. In recent years, institutions such as JPMorgan have launched internal settlement tokens, while central banks continue to pilot retail and wholesale CBDCs.
This latest effort could bridge the two worlds, offering a regulated alternative to privately issued stablecoins like USDT or USDC.
For the participating banks, the motivation is twofold: to maintain relevance in an increasingly tokenised financial system and to test ways to deliver faster, programmable cross-border settlement. The focus on G7 currencies also hints at ambitions to create a multi-currency framework compatible with existing payment networks.
Echoes of Libra — with key differences
The announcement inevitably invites comparison with Meta’s ill-fated Libra (later Diem) project, which six years ago sought to create a global digital currency backed by a basket of major fiat assets. Libra’s perceived challenge to monetary sovereignty provoked intense political and regulatory opposition, ultimately leading to its collapse before launch.
At a conceptual level, the two projects share a core ambition: issuing a reserve-backed, blockchain-based form of money that could move instantly across borders. Yet the contrast in approach is striking. Libra was driven by a technology company and initially positioned as a near-global retail currency; the new initiative comes from heavily regulated banks, framed explicitly as complementary to the existing financial system and subject to full supervisory oversight.
Where Libra operated from outside the banking sector, these institutions are deeply embedded within it — holding capital buffers, facing prudential regulation, and already integrated into payment and settlement infrastructure. This institutional foundation could make regulators more receptive, though questions of governance, interoperability, and systemic impact remain.
Regulatory and competitive implications
Should the project advance beyond feasibility studies, it could provide a template for how the banking sector adopts tokenised money without ceding ground to fintech-led stablecoins or decentralised finance platforms. However, it will also raise issues familiar from the Libra debate:
– how such instruments interact with monetary policy,
– whether they create new forms of private money, and
– how cross-border flows would be supervised.
Central banks are likely to scrutinise the initiative closely, particularly given ongoing efforts to design wholesale CBDCs. If successful, the project might demonstrate that regulated private-sector digital money can coexist with central-bank initiatives — or it could reopen unresolved tensions about who should control the future of money.
