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November 27, 2025, Minneapolis & New York: U.S. Bancorp (NYSE: USB), has begun piloting its own fully compliant, dollar-backed stablecoin on the Stellar blockchain.
The pilot, revealed on November 25 during the Money 20/20 conference in Las Vegas, marks the first time a top-tier U.S. bank has tested issuing a programmable digital dollar with built-in KYC, transaction clawback capabilities, and near-instant 3–5 second settlement times.
The project is being developed in partnership with the Stellar Development Foundation (SDF) and global consultancy PwC.
The news triggered an immediate 2.6% rally in Stellar’s native token XLM, pushing it to $0.25 within hours and boosting 24-hour trading volume by 45%.
Key Takeaways
- A top-5 U.S. bank just proved that fully compliant, programmable digital dollars can settle in 3–5 seconds, 90%+ cheaper than existing cross-border rails.
- Stellar’s built-in KYC and clawback tools are now battle-tested by one of America’s most conservative financial institutions.
- XLM’s 2.6% surge to $0.25 is only the opening act, analysts see potential for 5–10× growth if more banks follow U.S. Bancorp onto public blockchains.
- Tokenized deposits and RWAs just got a massive vote of confidence from traditional finance.
- 2026 could mark the year bank-issued stablecoins finally overtake offshore giants like Tether in regulated markets.
How the U.S. Bank Stablecoin Pilot Actually Works
According to Mike Villano, Head of Digital Assets at U.S. Bank, the custom stablecoin is pegged 1:1 to the U.S. dollar and backed by cash and cash-equivalents held in segregated bank custody accounts.
Unlike retail-focused stablecoins such as USDT or USDC, this token is engineered from the ground up for institutional-grade compliance.
Key technical features include:
- Protocol-level KYC/AML controls baked into Stellar’s core
- Asset freeze and clawback functions that allow the bank to reverse or halt transactions if required by regulators
- Sub-second finality (3–5 seconds) compared to minutes or days on legacy rails like SWIFT
- Programmable smart-contract logic for automated treasury and payment flows
“Stellar gives us the compliance tools we need in a public blockchain environment,” Villano said during the Money 20/20 podcast. “We’re not asking regulators for permission to innovate, we’re building innovation that regulators already understand.”
Market Reaction: XLM Jumps as Institutions Take Notice
XLM traded as high as $0.253 in the hours following the announcement, its strongest single-day performance in three weeks. On-chain data shows large wallet accumulation and a 45% spike in trading volume across major exchanges including Binance, Coinbase, and Kraken.
The rally builds on existing momentum:
PayPal’s PYUSD stablecoin already runs on Stellar, and Citi recently named the network in its own tokenization trials.
Expert Voices: “This Is the Blueprint Banks Have Been Waiting For”
Kurt Fields, Crypto and Digital Assets Leader at PwC U.S., called the pilot “a turning point for regulated programmable money.”
“Banks don’t want to custody private keys or run nodes,” Fields told reporters. “They want the efficiency of blockchain with the guardrails of traditional finance. Stellar’s compliance suite finally delivers both.”
José Fernández da Ponte, Head of Payments Partnerships at the Stellar Development Foundation, added: “When a bank the size of U.S. Bancorp chooses public infrastructure over permissioned chains, it sends a clear message to the entire industry.”
Conclusion
The U.S. Bank pilot is far more than a technology experiment, it’s the clearest signal yet that America’s banking giants are ready to embrace public blockchains.
With compliance, speed, and scalability now solved in one package, the race to issue the first production-grade “digital dollar” by a major bank has officially begun.
Investors, developers, and fintech founders are all asking the same question:
If U.S. Bank can do it on Stellar today, which trillion-dollar bank launches tomorrow?
Read Next:
- USDT vs. USDC vs. BUSD: Which Fiat-Backed Stablecoin Is Safest in 2025?
- Stablecoin Tax Guide 2025: Reporting and Tools for Compliance
- The Future of Stablecoins: What's Next in 2026 and Beyond
FAQs:
1. What exactly is U.S. Bank testing on the Stellar network right now?
U.S. Bancorp is piloting its own USD-pegged stablecoin with built-in KYC, transaction clawback, and 3–5 second settlement times. Reserves are held in segregated bank accounts, and the token runs natively on the public Stellar blockchain.
2. Why did U.S. Bank pick Stellar instead of Ethereum or a private blockchain?
Stellar offers native compliance tools (asset freeze/clawback), 99.99% uptime over 10+ years, sub-second finality, and fees under a fraction of a cent, features that align perfectly with strict banking regulations and institutional cost requirements.
3. How much did XLM rise after the U.S. Bank announcement?
XLM surged 2.6% in the first 24 hours, hitting $0.25, with trading volume jumping 45%. The move extended Stellar’s weekly gains to over 8%.
4. When will regular customers be able to use this U.S. Bank stablecoin?
This is currently an internal pilot focused on institutional payments and treasury use cases. If successful, a broader rollout could begin in late 2026 or 2027, subject to regulatory green lights.
5. Is this the first major U.S. bank to issue its own stablecoin?
Yes, while JPMorgan (JPM Coin) and Signature Bank experimented with private-ledger tokens, U.S. Bancorp is the first top-tier U.S. bank to test a fully compliant stablecoin on a public blockchain with retail-facing potential.
