In short
- US Bank is testing its own stablecoin on the Stellar blockchain.
- The company is working on the project together with the Stellar Development Foundation and PwC.
- US Bank joins Citi, Goldman Sachs, Bank of America and others as traditional banks now experimenting with stablecoins and crypto rails.
Listed bank US Bank is testing a stablecoin on the Stellar blockchain, the company announced on Tuesday.
The Minneapolis-based bank is working on the project with consulting firm PwC and the Stellar Development Foundation.
“It’s another way to move money on a blockchain, and we see blockchain as an alternative payment trail,” said Mike Villano, senior VP and head of digital asset products at US Bank, at the Future of Finance podcast. “We are very curious to see what use cases will emerge from this and what customers will be most interested in.”
The company joins a growing list of banks nationwide considering diving into the stablecoin waters as institutional interest grows following the deal’s signing. GENIUS Act, which regulates the issuance and trading of the tokens.
Last month, Citi, Goldman Sachs, Barclays and Bank of America, among others, were included in a list of banks considering a joint stablecoin venture. Both before Citi And Bank of America had individually expressed their interest in stablecoins earlier this year.
“The primary goal was to demonstrate the promise of blockchain in a trusted, bankable environment,” Kurt Fields, a Blockchain leader at PwC, said of US Bank’s involvement.
The company’s work with Stellar is partly due to the underlying architecture of the layer 1 network, which allows transactions to be frozen or reversed at the blockchain level.
“One of the great things about the Stellar platform, when we did a little more research and development on it, was that we discovered that on their base layer they have the ability to freeze assets and settle transactions,” Villano said. “Often you can write that into the business logic itself, but in this case you can do it at the core of the blockchain layer.”
Stellar’s payments and remittances-focused blockchain has been live since 2014. It currently ranks 19th by stablecoin market capitalization, with approximately $212 million currently stabled on the network – $200 million or 94% of which is issued as Circle’s USDC dollar-backed stablecoin.
The network has seen stablecoin outflows of more than 20% in the past seven days. according to data from DefiLlama.
The partnership with Stellar is not US Bank’s only connection with stablecoins. The company announced this in October would hold the reserves for the stablecoins of crypto bank Anchorage Digital.
Shares of US Bancorp rose 2.8% on Tuesday and recently changed hands at $49.08 per share.
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