Simply put
- US Bank is piloting its own stablecoin on the Stellar blockchain.
- The initiative is a collaboration with Stellar Development Foundation and PwC.
- US Bank is joining a group of traditional banks, including Citi, Goldman Sachs, and Bank of America, that are exploring stablecoins and crypto solutions.
US Bank has announced plans to test a stablecoin on the Stellar blockchain. This effort was shared publicly on Tuesday.
Based in Minneapolis, the bank is collaborating with consulting firm PwC and the Stellar Development Foundation for this project.
“This is another approach to transferring money via blockchain, and we’re exploring blockchain as a potential payment solution,” remarked Mike Villano, a senior vice president at US Bank. “We’re eager to see what use cases arise and which ones pique our customers’ interest.”
The bank’s endeavor adds to a list of increasingly interested financial institutions following a recent regulatory agreement regarding token issuance and trading.
Last month, banks like Citi, Goldman Sachs, Barclays, and Bank of America were also mentioned as considering their own stablecoin initiatives; these institutions had already expressed interest in stablecoins earlier this year.
“The primary aim was to illustrate blockchain’s potential in a trustworthy, bank-level setting,” stated Kurt Fields, Blockchain Leader at PwC, regarding US Bank’s efforts.
One reason for partnering with Stellar is its Layer 1 network architecture, which allows transactions to be frozen or reversed at the blockchain level.
Launched in 2014, Stellar’s blockchain focuses on payments and remittances. It currently ranks 19th in terms of stablecoin market cap, with approximately $212 million worth of stablecoins, most of which are Circle’s USDC dollar-backed coins.
Over the past week, the network experienced stablecoin outflows exceeding 20%.
US Bank’s involvement with stablecoins isn’t limited to its Stellar partnership. In October, it was revealed that the company would provide custody services for reserves backing payment stablecoins from Anchorage Digital Bank.
On Tuesday, US Bancorp’s stock increased by 2.8%, trading at $49.08 per share.
