U.S. Bank, a publicly traded bank based in Minneapolis, has announced it is testing a stablecoin on the Stellar blockchain. The project is a collaboration with consulting firm PwC and the Stellar Development Foundation.
According to Mike Villano, head of digital asset products at U.S. Bank, the move views the blockchain as an “alternative payment rail,” with the bank keen to explore potential customer use cases.
The bank is one of several financial institutions exploring stablecoins following the signing of the GENIUS Act, which provides regulation for the tokens. Other major banks, including Citi, Goldman Sachs, Barclays, and Bank of America, are also reportedly considering a joint stablecoin venture.
Stellar’s Architectural Advantage:
A key factor in U.S. Bank’s choice of Stellar is the layer-1 network’s underlying architecture, which allows for advanced transaction controls:
“One of the great things about the Stellar platform… was learning that they have the ability at their base operating layer to freeze assets and unwind transactions,” said Villano.
Stellar, a payments and remittances focused blockchain live since 2014, currently ranks 19th by stablecoin market cap, with Circle’s USDC accounting for 94% of the $212 million worth of stables on the network.
Broader Stablecoin Activity:
- U.S. Bank also has an existing stablecoin connection, having agreed to custody the reserves for crypto bank Anchorage Digital’s stablecoins in October.
- Separately, Swedish fintech company Klarna announced it will launch its own stablecoin, KlarnaUSD, on the Tempo layer-1 network next year.
Following the announcement, shares of U.S. Bancorp were up 2.8% at $49.08 per share.
