Tether sheds $6.6B as 21 banks pour $270M into a rival stablecoin

CryptoQuant data shows USDT's market capitalization fell by $6.6 billion in the 60 days ending November 7 — the steepest drop since the firm began tracking the figure in 2022, and larger than the $3.2 billion decline that followed the FTX collapse. Overall stablecoin capitalization now sits near $290 billion. The trend suggests investors are yanking capital out of stablecoins instead of holding it ready for crypto trades, leaving fewer dollars to back new positions or fund a market recovery.

Bitcoin is getting no help from demand either: roughly 284,000 fewer BTC were in demand across 30 days, according to CryptoQuant. Without fresh money moving into stablecoins, buyers may find it hard to sustain a rally.

Into that gap walks Project Faro, a joint stablecoin venture that has secured $270 million from 21 major financial firms, among them Goldman Sachs, Citi, Santander and Deutsche Bank. The cash is earmarked to fund five years of operations before the group launches its dollar-backed stablecoin in the first half of 2027, with a euro-backed coin expected to follow. The raise shows how keen established banks are to grab a slice of a stablecoin market whose total value has shrunk to $290 billion.

Displacing the incumbents is a different fight. Tether and Circle together control roughly 85% of stablecoin supply, making adoption and liquidity Project Faro's toughest hurdles.

Faro's pitch rests on cross-border payments — dollar-backed tokens that cross borders without waiting on the standard bank settlement period, which could sharpen payment speed and access to funds for multinationals working across several markets. The real verdict, though, comes down to whether businesses route recurring payments through it. That usage, not the list of banking backers, will decide if Project Faro earns a meaningful role in stablecoin liquidity.