U.S. Bank tests dollar‑backed stablecoin on Stellar for cross‑border payments
Live cross‑border payment pilot
U.S. Bank reported that it successfully moved value between its North American and European entities using USBDC, a dollar‑backed stablecoin it issued on the Stellar blockchain. The transaction was settled on the Stellar network while staying linked to the bank’s internal finance and compliance systems.
Key details of USBDC
- The token is backed by U.S. dollars, but the bank did not disclose the amount moved or the location of the reserves.
- The pilot tested four functions: minting (creating tokens), redemption (converting tokens back to cash), freezing (blocking token movement), and clawback (retrieving tokens).
- The bank’s Digital Asset Platform handled the token issuance and movement, connecting existing infrastructure to the blockchain.
Stellar network involvement
Stellar is a public, permissionless blockchain that enables fast, low‑cost transfers. The network has attracted other financial institutions, such as Franklin Templeton and DTCC, to build tokenized assets. At the time of the report, Stellar’s native token XLM was trading around $0.18.
What is confirmed
- U.S. Bank completed a live cross‑border payment using its own stablecoin on Stellar.
- The pilot included minting, redemption, freezing, and clawback functionality.
- The transaction remained connected to the bank’s core finance, risk, compliance, and operations systems.
What remains unclear
- The exact amount of money transferred in the pilot.
- Whether USBDC will be offered to external clients.
- Details about the token’s reserve assets and where they are held.
Why it matters
Testing a stablecoin on a public blockchain shows how a regulated bank can use distributed‑ledger technology for international cash management while keeping supervisory controls such as freezing and clawback.
