Market Watch

U.S. Bank Tests Custom Stablecoin Issuance on Stellar Network

U.S. Bank, the fifth-largest commercial bank in the U.S., has started testing the issuance of custom stablecoins on the Stellar network, according to a Tuesday announcement. Teaming up with PwC and the Stellar Development Foundation (SDF) for the initiative, the bank aims to explore whether a traditional bank can safely issue programmable money on a public blockchain, according to the blog post.

U.S. Bank’s digital asset head, Mike Villano, highlighted in the blog post Stellar’s built-in ability to freeze or unwind transactions as a key feature that aligns with regulatory and compliance requirements, such as Know-Your-Customer (KYC) and transaction reversibility, critical features if banks are to adopt blockchain rails for mainstream use.

Stablecoins, which are cryptocurrencies with prices anchored to a fiat cy like the U.S. dollar, are gaining traction as potential tools for faster, cheaper payments across borders. Financial institutions and global businesses are increasingly explore embedding them into their operations and treasury management to cut costs. Cross-border stablecoin payments could hit $1 trillion in annual volume by the end of the decade, Keyrock projected.

Terron Gold

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