US Bancorp has begun testing a stablecoin system on the Stellar blockchain. This initiative is a collaborative project involving the consulting firm PricewaterhouseCoopers (PwC) and the Stellar Development Foundation.
The Stellar Development Foundation announced the news on Tuesday, highlighting that this development signifies the full entry of major financial institutions into the digital asset space.
US Bank, a public entity managing over $664 billion in assets and generating annual revenue exceeding $27.5 billion, views this trial as an opportunity to evaluate blockchain technology's functionality within a regulated banking environment.
PwC: The Time for Discussion Is Over
Kurt Fields, director and blockchain lead at PwC, discussed the pilot program during an episode of the US Bank podcast Money 20/20 on Tuesday. He stated that the industry has spent years debating the potential of blockchain technology, and he believes the current focus should be on demonstrating its performance under stringent oversight.
Fields further explained that the project aims to illustrate the clear advantages that on-chain systems can offer to both financial institutions and their customers. He pointed out that programmable digital money could facilitate smoother processes and quicker settlements, provided the system is designed to comply with rigorous banking regulations.
The Stellar network, which was launched in 2014, is an open-source blockchain designed for cross-border payments and asset tokenization. Its objective is to enable rapid transactions and provide controls suitable for institutions operating under strict regulatory frameworks.
Why Stellar?
Mike Villano, head of digital asset products at US Bank, explained that his team selected Stellar due to its inherent capabilities to freeze assets and reverse transactions when necessary.
He elaborated that many custom business logic systems require such security features, whereas Stellar provides these controls at the core network level. Villano emphasized that this functionality was a crucial factor for a bank committed to protecting its customers.
Villano also revealed that US Bank is actively researching tokenized assets. He indicated that the team is exploring the application of fast, round-the-clock transfer capabilities to a diverse range of asset types beyond stablecoins.
The initial findings from this research have been encouraging, prompting further investigation. The bank intends to continue exploring how these models might support future service offerings.
This pilot program is expected to help US Bank gain a comprehensive understanding of how blockchain-based settlement solutions can be integrated into its broader digital strategy, particularly as the industry develops new payment rails engineered for enhanced speed and stricter regulatory compliance.