U.S. Bank Issues Its Own Stablecoin On Stellar

U.S. Bank completed a live cross-border payment between its North American and European entities using USBDC, a dollar-backed stablecoin the bank issued on Stellar, the bank said Wednesday.

A federally regulated U.S. bank issuing its own token on a permissionless chain puts bank money on the same rails as USDT and USDC. The bank kept the controls a supervisor would ask for: the pilot tested freezing and clawback alongside minting and payment redemption.

The transaction settled on Stellar while staying connected to the bank's core finance, risk, compliance and operations systems, U.S. Bank said. It also validated the bank's internally developed Digital Asset Platform, which issues and moves tokenized assets and links the bank's existing infrastructure to blockchain networks.

"This live pilot demonstrates our ability to accelerate global cash management and money movement capabilities," said Gunjan Kedia, chairman and chief executive officer at U.S. Bank.

Mint, Freeze, Claw Back

The bank did not say how much money moved, whether USBDC will be offered to clients, what backs the token or where the reserves sit. Uses still under review include liquidity management, collateral mobility and cross-border treasury operations, according to the release.

"Our focus remains on delivering solutions that solve real client challenges while maintaining the safety, security and reliability that clients expect from U.S. Bank," said Jamie Walker, head of digital assets and money movement at U.S. Bank.

Stellar's Institutional Book

Stellar has been collecting this kind of client. Real-world asset balances on the network have grown faster than its DeFi markets, The Defiant reported in August. Nora Wahlbrink of Breakwater Strategy, circulating the release on Stellar's behalf, said U.S. Bank now joins Franklin Templeton and DTCC in building on the network. Twenty-one financial institutions committed to a joint stablecoin venture last week, The Defiant reported.

XLM traded at $0.1828 on Thursday, down 3.1% over 24 hours and up 4.9% on the week, with a market value of $6.37 billion, according to CoinGecko.