US Bancorp, which does business as (and is better known as) US Bank, has begun testing its own stablecoin on the Stellar blockchain. The pilot, detailed in a recent Bloomberg reportfocuses on using the token for faster and cheaper cross-border payments while integrating safeguards such as customer verification and transaction cancellation. Mike Villano, senior vice president of digital asset products at the bank, highlighted Stellar’s fit with traditional financial services as a key selling point for the bank.
While Gunjan Kedia, CEO of US Bancorp, noted that demand for stablecoin payments from customers remains subdued, these dollar-backed digital assets have become crypto’s main selling point in recent years, serving as a primary use case beyond that. the role of Bitcoin as a long-term store of value and the game in the Memecoin Casino Often Rigged.
And for crypto networks like Ethereum focused on decentralized finance (DeFi), the volume of stablecoins determines the bulk of financial activity and user adoption. In fact, these blockchains are so reliant on these centrally issued dollar tokens that it calls into question the true differences between this new blockchain technology and traditional fintech, beyond whether DeFi can be primarily decentralized in name alone.
DeFi skeptics have long warned against relying on stablecoins as a shortcut for user adoption, a reliance now glaring as fintech companies like Stripe, Coinbase, Robinhood and various stablecoin operators deploy blockchains optimized for speed and ease of use at the expense of peer-to-peer financial sovereignty.
And this merger between crypto, fintech, financial services companies and traditional banks via stablecoins is accelerating.
Here are some of the countless examples of this phenomenon: Klarna has just become the first fintech to issue a stablecoin, KlarnaUSD, on Stripe’s Tempo channel. MoneyGram expands its use of stablecoins for remittances after rapid testing of the technology, according to Crossmint co-founder Rodrigo Fernández Touza. Revolut has rolled out free, one-to-one fiat-to-stable currency exchanges for its 65 million users. a few weeks ago. Deel’s new head of crypto announcement a few days ago, a new crypto sector for the payroll provider. Citi And JPMorgan Chase both have stablecoin-related partnerships with Coinbase.
These launches show how technology is evolving to become an efficiency booster for incumbents, without necessarily becoming a true disruptor. A line from Bloomberg A report on US Bancorp’s interest in the stablecoin should be particularly discounted for Bitcoin veterans: Villano called the possibility of freezing assets on Stellar “particularly attractive.”
This control mechanism directly subverts Bitcoin creator Satoshi Nakamoto’s vision of a trustless, censorship-resistant currency by prioritizing bank surveillance over user sovereignty. On a related note, Circle CEO Jeremy Allaire was also ridiculed last week for assignment “Circle ♥️ Banks. »
Growing tensions between cypherpunks and those simply building technology for banks erupted in October when Dankrad Feist, Researcher at the Ethereum Foundation, Switched to Temposparking accusations that the space is moving too far away from decentralization towards bank-friendly infrastructure.
The stablecoin phenomenon also highlights political enthusiasm for crypto from the Trump administration. From Washington’s perspective, stablecoins can be used to expand dollar hegemony globally, as codified in the GENIUS Act signed by President Trump in July.
Yet in recent weeks, the co-founders of the Bitcoin privacy wallet Samourai Wallet have been sentenced to several years in prison for money transmission violations. The prison sentence imposed on the developers of Samourai Wallet is particularly embarrassing in comparison to the pardon received by the former CEO of crypto exchange Binance for somewhat similar costs.
It’s clear that crypto has simply lost the plot at this point, assuming it ever had one.
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