NEW YORK CITY, New York: A group of 21 financial institutions, including Goldman Sachs, Bank of America, Citi and Deutsche Bank, plans to establish a company this year that will issue a dollar-pegged cryptocurrency in the first half of 2027.

The group, first announced in October 2025 with 10 banks, said September 1 that it also intends to expand into stablecoins pegged to other G7 currencies, with the euro a priority.

Stablecoins are cryptocurrencies designed to maintain a fixed value against an asset such as a conventional currency. They are used to move money around the world and are mostly used in crypto trading.

A rebound in cryptocurrency prices in 2024 and U.S. President Donald Trump's support for the sector have renewed interest in using blockchain technology in the mainstream financial system.

The group will compete with a separate consortium of 37 financial institutions that formed a company called Qivalis and plans to launch a euro-pegged stablecoin later this year. Some financial institutions, including Spanish bank BBVA, belong to both groups.

President Trump's family crypto business, World Liberty Financial, has also issued its own stablecoin.

However, there have been few signs of demand for stablecoins issued by banks.

The stablecoin market is dominated by El Salvador-based Tether, which says it has issued more than US$180 billion worth of its dollar-pegged token. The company has made billions of dollars in profits by investing its reserves in assets including U.S. Treasuries.

France's Societe Generale, which does not belong to either consortium, became the first major bank to issue a dollar-backed stablecoin through its digital asset subsidiary last year.

The token has not been widely adopted, with just $12.5 million in circulation, according to its website.

European Central Bank President Christine Lagarde has warned that privately issued stablecoins pose risks to monetary policy and financial stability.