Banking giant US Bancorp has been actively testing stablecoins over the past few months and leveraging the Stellar blockchain as part of its plan.
Summary
- US Bancorp is testing stablecoin payment and custody services on the Stellar blockchain amid renewed interest in digital assets.
- Other major US banks, including Citi, Goldman Sachs and Bank of America, have also begun exploring stablecoin initiatives.
US Bancorp, which operates as US Bank, is experimenting with transactions on the Stellar blockchain, as the bank views stablecoins as “another way to move money on a blockchain,” said Mike Villano, senior vice president and head of digital asset products at US Bank, during a recent podcast appearance.
“We’re very interested to see what use cases are going to emerge and which customers are going to be most interested,” Villano said.
US Bancorp Chairman and CEO Gunjan Kedia first disclosed the ongoing pilot during an earnings call in October. At the time, she said the bank was exploring stablecoins in two main areas, custody and stablecoin payments, but added that customer payment demand was “subdued.”
US Bancorp is generally considered one of the most cryptocurrency-friendly banking institutions in the country, and has maintained a cautious but persistent presence in the cryptocurrency sector through its custody and infrastructure services.
Initially, the bank had to suspend its Bitcoin custody service for nearly three years due to prohibitive capital requirements, and last year faced additional oversight pressure from the Federal Reserve over its exposure to digital assets.
But as the regulatory climate has changed under a more crypto-friendly administration led by President Donald Trump, with pro-crypto developments like the repeal of SEC Rule SAB 121 that required banks to hold capital against customers’ crypto holdings, and the introduction of forward-thinking legislation like the GENIUS Act, banking has slowly re-entered the space.
Last month, US Bancorp said it had resumed institutional custody of Bitcoin after a three-year hiatus, and less than a month later it expanded into stablecoins alongside a growing list of other major financial institutions taking similar steps.
“Off-the-shelf stablecoins enable faster and cheaper payments, 24/7,” Villano continued, adding that the bank chose the Stellar blockchain because of its finance-focused architecture and additional layers of control that meet the requirements of institutional clients.
“We had to think about other protections around knowing our customers, being able to transact online, being able to recover transactions,” he said.
The Stellar blockchain offers built-in tools that allow issuers to freeze and reverse asset transfers, which is one of the main reasons the US bank chose to rely on it.
“Often you can write this in the business logic itself, but in this case you can do it at the backend layer of the blockchain,” Villano added.
Stellar currently ranks 19th in terms of stablecoin market capitalization, with approximately $212 million worth of stablecoins operating on the network. Its blockchain focused on payments and remittances has been active since 2014.
Currently, there is no publicly available information on when the US bank’s stablecoin initiative might launch or how the broader system might be structured.
Banks Eye Stable Coin Market
US Bancorp joins a small but growing list of banks that have begun actively exploring stablecoin use cases, particularly after the passage of stablecoin legislation in the United States.
Citibank is one of the most prominent names in this movement, with reports emerging as early as June that the bank was looking to issue its own stablecoin, and it recently chose Coinbase as its operating partner.
Last month, Citi, alongside other heavyweights like Goldman Sachs and Bank of America, announced the creation of a consortium that would study and test various stablecoin use cases in institutional settings.
With the global stablecoin market expected to explode in the coming years, traditional institutions around the world are racing to build the infrastructure necessary to claim a share of the expanding sector.
Elsewhere in Europe, nine of the region’s largest banks launched a similar initiative in September to explore applications and licensing pathways for euro-pegged stablecoins.
