U.S. Bank Tests Custom Stablecoin Issuance on Stellar
U.S. Bank’s Stablecoin Pilot: A Game-Changer for Regulated Issuance
U.S. Bank, one of America’s largest financial institutions, is testing custom stablecoin issuance on the Stellar ($XLM) network in collaboration with PwC and the Stellar Development Foundation (SDF). This initiative, highlighted in the U.S. Bank Money 20/20 podcast “The Tokenized Future of Banking,” explores how banks can create and manage programmable digital dollars with built-in compliance features. For crypto newcomers, stablecoins are digital tokens pegged to fiat like the USD, but “custom” means tailored controls for banks, think reversible transactions or asset freezes. As Mike Villano, Senior Vice President and Head of Digital Asset Products at U.S. Bank, explained, “For bank customers, we have to think about other protections around know your customers, the ability to unwind transactions, the ability to clawback transactions.” This pilot signals TradFi’s deepening embrace of blockchain for secure, efficient money movement.
Why Stellar? Reliability Meets Regulatory Needs
Stellar stands out for mission-critical systems. It boasts 99.99% uptime over a decade and processes billions in annual payments. Transactions settle in 3-5 seconds for a fraction of a U.S. cent. Crucially, its base layer supports asset controls like freezing and unwinding, essential for banks. Villano added, “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.” These features align with KYC and clawback requirements, making Stellar ideal for regulated stablecoins. As SDF’s José Fernández da Ponte noted, “When you are doing mission critical systems… you need to make sure that your blockchain is going to be there.” With Stellar’s global reach (72 countries, 47 currencies), it empowers banks to innovate without compromising security.
The Pilot’s Focus: Programmable Money with Bank-Grade Protections
This test emphasizes “programmable money” stablecoins with embedded rules for automation and compliance. U.S. Bank explores issuance tailored to corporate needs, like automated treasury management or supply chain payments. PwC provides audit and advisory support, ensuring adherence to regs like the GENIUS Act. Early results highlight Stellar’s configurability: Banks can pause assets for fraud checks or reverse errors seamlessly. As the podcast revealed, this could unlock $16T in RWAs by 2030, with stablecoins settling more value than Visa/Mastercard combined. For institutions, it’s a low-risk entry to on-chain finance; for users, faster, cheaper global transfers.
Stellar’s Horizon: From Testing to Mainstream Banking
This pilot cements Stellar’s role in TradFi-blockchain fusion. With $639M RWA TVL and $4.2B quarterly volumes, it’s primed for scale. For $XLM holders, demand rises, more issuance means fees in Lumens, with XLM at $0.34 (up 2%). As Q1 2026 pilots expand, watch banks like U.S. Bank lead adoption. Platforms like Lumexo simplify $XLM and stablecoin trades with low fees. In short, programmable money isn’t future, it’s now.